In coming years, it is reasonable to expect global term premia to rise as net asset purchases could shift significantly from the situation during the past four years when all net issuance within the G4 was effectively absorbed (Table 1). 35  Hélène Rey has been a key proponent of the importance of such channels. See, for example, Miranda-Agrippino, S and Rey, H (2015), ‘World asset markets and the global financial crisis’, NBER Working Paper No. 21722. 36 IMF Global Financial Stability Report 2017, Chapter 3. 37 Cesa-Bianchi, A and Sokol, A ‘The international credit channel of US monetary policy and credit shocks’, forthcoming. 14  All speeches are available online at www.bankofengland.co.uk/speeches  14  Table 1: G4 net asset issuance still low in 2017  $ Asset purchases Bond issuance Net issuance  2008  2009  2010  2011  2012  2013  2014  2015  2016  2017  -61  1756  451  670  642  1756  1254  1312  1799  1338  2936  2664  3534  2486  2263  1753  1525  1093  1286  1527  2997  908  3083  1816  1622  -3  270  -219  -513  189  Notes: G4 here are the UK, EA, US and Japan. Bond issuance refers to annual changes in the stock of the general government debt. Agency debt is also included for the US.
From what I have said it follows that there should be a repo rate that is commensurate with stable inflation and a demand growth that matches the expansion of capacity while the economy is also balanced in other respects. It is around this level of interest rates that the actual repo rate ought to be varied as activity moves up and down. So what is the Swedish economy’s sustainable growth rate and what is the commensurate repo rate? The Swedish economy’s sustainable growth rate A simple way of estimating the potential growth rate is to add the figure for the trend rate of increase in labour supply to the growth rate for labour productivity. 1  BIS Review 13/2000  The latest figures, based among other things on demographic changes and labour force participation, point to an annual increase in labour supply up to 2008 of 0.5%.1 As regards labour productivity, most of the evidence suggests that the trend in the 1990s was higher than in the 1970s and 1980s. In the period 1974-93, for example, the annual increase in labour productivity averaged approximately 1.4%, while the average since 1994 is about 1.9%.