External events, the dynamics in industry and in particular economic policy can change the potential growth rate of the economy. In other words, it is possible to both raise and lower the speed limit, depending on what is happening in the economy. However, at a given point in time there is a limit that cannot be exceeded or gone below without damaging consequences. If growth exceeds the limit for a longer period, overheating and inflationary pressure will arise. If growth is too low, the opposite will apply, resulting in higher unemployment and poorer welfare than necessary. Let us compare the Swedish economy with driving a car. The Riksbank's job is made easier if the car and the road allow some speed, without accidents occurring. The work done in other political areas to promote growth in trade and industry is therefore very important in enabling the Riksbank to maintain a low interest rate. The Riksbank cannot affect potential growth; our role is to create good conditions for other private and public operators. It is their work on structural reforms, better infrastructure, education, research, entrepreneurship, innovations, etc. that improves the economy's long-term capacity to create growth and thereby welfare in the long term. The decisive factor for monetary policy is the speed limit over a longer period of time. If we have low capacity utilisation from the start, we can temporarily have higher growth, i.e. accelerate until we have achieved the economy's cruising speed.
Another method of raising potential growth would be to invest so heavily that the productivity of the labour force increased sufficiently to allow one worker to support one pensioner in the future. Capacity for renewal To summarise, much has changed recently in the Swedish economy. The external framework is currently characterised by a substantial fiscal policy and monetary policy stability, which facilitates planning and decision-making for both households and companies. These fundamental conditions, together with a marked increase in openness to the world around us, give reason to believe in a continued favourable development in productivity. At the same time, one should remember that many markets in Sweden still show clear signs of poor competition. This involves considerable costs. I believe that the Swedish economy has considerable unutilised potential for stronger development if we concentrate on this, i.e. how we shall increase the "speed limit" in the economy. It is not enough to have good macroeconomic conditions; a policy for growth is concerned more with microeconomics than macroeconomics. It is a question of creating good incentives for individuals and people to behave in a rational social manner in their roles as economic agents. What is profitable and attractive behaviour for the individual should also be profitable for the whole. This takes me into the field of politics, which is not part of the Riksbank's responsibilities. However, this is a field where I have been very involved in my previous career roles.