Conclusion (i): It is important not to lose sight of inflation and inflation expectations My conclusion that it is important not to lose sight of inflation and inflation expectations may seem obvious and trivial to many people, but it is nevertheless worth some reflection. Moreover, the international debate that has arisen recently suggests that it may not be so obvious after all. One apparent reason for keeping sight of inflation is that it has turned out to be surprisingly difficult to bring it back on target once it has fallen, particularly if inflation expectations have fallen too. I have to admit that I, for one, underestimated these problems. One possible explanation is that I, probably along with many others, had been lulled into a belief that the positive developments in the years prior to the financial crisis confirmed that we had succeeded in tackling the more significant problems and that the inflation target was completely credible and more or less a natural element of the Swedish economy. Of course, that it is important not to lose sight of inflation is easy to say, but it is harder to live up to. Obviously, it was not the Riksbank’s intention for inflation to become as low as it did and for such a long time. 11 We made the best forecasts we could and implemented the policies we deemed to be the most appropriate.
SPEECH DATE:  6 Dec 2017  SPEAKER:  Deputy Governor Per Jansson  VENUE:  Fores, Stockholm  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  The ideological debate on monetary policy – lessons from developments in Sweden∗  These are unusually exciting times to be working at a central bank. Challenges have always been present, of course, but I think that it could be claimed that seldom have they been of such a fundamental nature as they are today. One example is the debate on limiting central banks’ independence that has arisen recently. This has come about after several countries have found themselves unable to conduct monetary policy using policy rate adjustments alone. Instead, they have had to complement this with tools that some observers feel have blurred the boundary between monetary policy and other economic policies. Another example is that technological progress within the area of payments has led to the rapid decline of cash usage in a number of countries, not least Sweden. Whether and how this trend will affect the conditions for conducting monetary policy and whether it provides reason for the central banks to issue electronic money as a complement to physical cash will be the focus of intense discussions in the period ahead. These are important and fundamental issues.