As the conditions are now very good with regard to the immediate economic trends that I mentioned to begin with, and as the structural changes in the Swedish business sector towards new advanced fields of production are moving quickly, it would be a national misfortune if wage formation were to get out of hand due to the parties not being able to deal with imbalances in relative wages. Consequences for monetary policy? What conclusions can be drawn regarding monetary policy? My intention with today’s speech is not to make new statements about current monetary policy. The intention is instead to create understanding for the balances that have to be struck and the risks that must be avoided in order for monetary policy to make a contribution to the positive development of the Swedish economy. The role of the interest rate for demand of goods and services and inflation can be described as follows in a highly simplified way. A real rate of interest, which neither stimulates nor dampens demand, may be said to be neutral. Demand then increases at the rate of capacity growth and inflation is stable. When capacity in the economy is not fully made use of and unemployment is high, the interest rate may - on condition that inflation expectations are in line with the target - need to be below its neutral position in order to stimulate demand so that it increases more quickly than capacity utilisation.
At the same time, there are imbalances in the sense that relative wages do not attract applicants for employment to the areas in the labour market where there are shortages. The challenge is to find a solution within the framework of the scope for pay increases created by the growth in productivity and inflationary expectations on a level with the target. Make use of available opportunities Sweden’s opportunities for regaining some lost ground in the prosperity league are good. Our country has a population which has taken to new technology in the field of IT more quickly than in many other countries; computer use is widespread at workplaces and also homes. According to a SIFO survey, 3.5 million Swedes surf the Internet - almost half of the population aged between 12 and 79. No fewer than 2 million Swedes surf every day. Even more remarkable is the fact that almost 20% of the age groups between 50 and 80 are active on the Internet. Together with some other countries, Sweden takes the absolutely leading position with regard to the use of IT, computers and mobile telephones. Young new entrepreneurs are starting successful businesses within the new areas alongside giants such as Ericsson. Pharmaceutical research and biotechnology are other areas where Sweden is well to the fore. Sweden is investing more in research in proportion to GDP than any other country in the world.