According to, for instance, Dagens Nyheter newspaper’s editorial pages, the policy was instead “an interest-rate increasing experiment”, based on the Riksbank governors spreading “misleading pictures of the future”.10 The only explanation I can think of for this claim nevertheless being repeated and referred to so often and so uncritically, is that people simply assume that it must be true because it has been expressed with such emphasis and intensity. A hazardous policy But claiming that it has all been about leaning against the wind is not only a misleading description of the policy conducted and the motives behind it. There is also good reason to wonder whether a policy whereby the repo rate had remained unchanged since the crisis might not have been rather risky, regardless of what one claims it would have represented. According to the counterfactual analysis, there were only gains and no problems: inflation would have been close to the target and employment would have been higher if the repo rate had not been raised. But I also believe that there would have been a major risk of other, less pleasant things happening that is disregarded in the analysis, consciously or unconsciously. 8  See, for instance, Visco (2014): “An actual example of the debate on the macro-prudential use of the policy rate relates to the tightening of monetary policy by the Sveriges Riksbank that began in July 2010 and peaked in July 2011.
It is a natural part of the economic debate that the Riksbank is being criticised, isn’t it? Wouldn’t it then be better to ignore the criticism and look ahead instead? No, I don’t think so. One important reason is that in the wake of the financial crisis there has been a discussion on the activities and tasks of central banks, what central banks should do and how they should do it. It is, of course, important that our debate on this here in Sweden is anchored in reality and based on how monetary policy has actually been conducted and what it has actually achieved. But meeting the criticism is important not just for the discussion here in Sweden. The debate on Swedish monetary policy also has an international interest and has been followed abroad, not least by other central banks.1 The reason is that a central issue in the international discussion has been to what extent central banks’ policy rates should be used as a complement to macroprudential policy, to counteract the build-up of financial imbalances, for instance, by trying to prevent lending and housing prices from rising too quickly.2 This is what is often called a policy of “leaning against the wind”, and I will hereafter use this expression for the sake of simplicity. Monetary policy in Sweden has in this context been regarded as particularly interesting, as the Riksbank is one of few central banks that, at least this far, has been explicit about taking such considerations into account in its policy-rate decisions.