Does that imply that the current stance is appropriate, if your staff forecasts are confirmed? Yes. And if there is a further deterioration, then we will react. But for now, our monetary policy stance is fully compatible with both inflation and real activity. The important element is that we are totally ready to react. And I would add another element, if I may: risks are tilted to the downside. Do you mean, in terms of real activity? Both in terms of real activity and in terms of inflation. So if those risks materialise, then we will react. Can you think about different monetary policy tools to address different problems? If the issue is with the exchange rate, official rates are probably the answer; if it’s real activity, then QE; if it’s monetary transmission, then it’s targeted longer-term refinancing operations (TLTRO)… We do not allocate our instruments to different objectives. Something that I think is relevant, but is sometimes a bit overlooked, is that monetary policy is not almighty. If there is a problem with price stability, that’s within our mandate. But this is something everyone has to keep in mind to avoid creating expectations that will not be met: we do not have the philosopher’s stone. Are you implying that having something of a policy mix would be good, in total respect of the ECB’s independence? Sure.
Øystein Olsen: A decade of forward guidance in Norway Speech by Mr Øystein Olsen, Governor of the Norges Bank (Central Bank of Norway), at a seminar, held at Columbia University, New York City, 8 April 2014. *  *  *  Accompanying charts can be found at the end of the speech or on the Norges Bank’s website. Please note that the text below may differ from the actual presentation. Thank you for inviting me to Columbia University. Economists in Norges Bank have been greatly inspired by researchers from this institution, and we have had the pleasure of hosting scholars from Columbia at a number of conferences in Norges Bank. Some of our economists have also been here as visiting scholars. It is therefore a particular pleasure for me to be here today. “Forward guidance” as an element of monetary policy has attracted attention in the aftermath of the international financial crisis. With key policy rates in some countries constrained at a lower bound, statements about central banks’ future actions have been used to affect interest rate expectations. Norges Bank has published explicit numerical interest rate forecasts as a regular part of our monetary policy communication for ten years. The interest rate forecast is our preferred way of guiding economic agents’ interest rate expectations. As such, our version of forward guidance has been reasonably successful. The topic of my talk is our framework for forward guidance and the experience gained over a decade of practising our approach.