To summarise, probably all of these factors have had some significance in stabilising the world economy. However, one must remember that 20 years is a short period when analysing economic cycles. Perhaps the current downturn will give us reason to reconsider the conclusion that the fluctuations have declined? In this context one usually mentions the importance of the extended period of high growth in some emerging economies. First and foremost China, but also India, has had an increasing significance for the world economy over the past decade. If domestic demand can be sustained in these countries, despite declining economic activity in the United States, Japan and Europe, it may lessen the downturn for the world as a whole. However, their growth opportunities should slow down as the economies enter a more mature phase. In the long term, they cannot support world growth. 2. Sweden  As each economic cycle is to some extent unique, one can never say exactly what will happen in any phase of a cycle. There is quite simply no such thing as a typical economic cycle. But it may nevertheless be interesting to look at how different variables can vary in the economic cycle in Sweden. As Sweden is a small, open economy with a large export sector, we are very much affected by what happens abroad. It is therefore often claimed that Swedish economic cycles are "imported”.
However, this could be at the cost of an even larger adjustment further ahead to bring down inflation expectations again. This was what happened in Sweden in the 1970s and 1980s. Although economic downturns cannot be avoided, fiscal and monetary policy can be conducted in such a way that the consequences for the economy are as small as possible. The impact of monetary policy is long-term and it is therefore important that confidence in the Riksbank's ability to stabilise inflation is maintained. This does not prevent us from taking into account developments in the real economy when we make our decisions on the repo rate. The Riksbank conducts what is known as “flexible” inflation targeting. Our aim is that inflation, when it deviates from the target, will normally return to the target level within a couple of years. If the shocks affecting the economy entail large deviations, it may take longer before the target is achieved in order to attain a smoother sequence of events for production and employment. When we were to make a decision on the interest rate in September, we faced a situation where the declining economic activity in Sweden and abroad needed to be placed in a context where many factors could conceivably affect inflation. The slowdown in economic activity has probably had a subduing effect on inflation. However, we have seen that economic cycles are not sufficiently regular to enable us to forecast how profound or prolonged a downturn will be.