The idea behind the recent policy has been to avoid the exchange rate appreciating too rapidly and in this way to hold inflation up until economic activity takes over as the driving force. Thus, the plan has not been to try to permanently battle against fundamentals. 12 This has so far worked relatively well, but we are now beginning to approach the critical stage where economic activity is supposed to take over the baton. One cannot escape the fact that inflation outcomes have been somewhat worrying recently. It is now mostly the CPI that is showing a clear upturn. The more underlying rate of inflation measured by the CPIF excluding energy prices has over the year developed more or less sideways, or even shown a tendency to decline slightly. The inflation outcomes in coming months will be very important. 10 See, for example, Goodfriend (2016). 11 For a more detailed discussion of the problem of very negative policy rates, see Alsterlind et al (2015) and  Nessén (2016). 12 However, for my own part I am not convinced that fundamentals currently need to lead to a signifi cant krona appreciation in real terms, see the minutes of the Riksbank's monetary policy meetings in September and October. 10 [20]  The conditions for economic activity to soon take over as the main driving force behind inflation nevertheless look good, given the positive development we are seeing in the real economy.
References Alsterlind, Jan, Armelius, Hanna, Forsman, David, Jönsson, Björn and Wretman, AnnaLena (2015), ”How far can the repo rate be cut?”, Economic Commentary, no. 11, Sveriges Riksbank. Ball, Laurence M. (2014), “The case for a long-run inflation target of four percent,” IMF Working Paper, WP/14/92, International Monetary Fund. 13 Ekonomisk Debatt (1996). 12 [20]  Bernanke, Ben S. (2016), “Modifying the Fed’s policy framework: Does a higher inflation target beat negative interest rates?”, blog post, Brookings, 13 September. Blanchard, Olivier, Dell’Ariccia, Giovanni and Mauro, Paolo (2010), “Rethinking macro policy”, IMF Staff Position Note SPN/10/03, International Monetary Fund. Bäckström, Urban (2003), ”1990-talets väg till prisstabilitet” (the 1990s route to price stability), Chapter 6 in Jonung, Lars (ed. ), På jakt efter ett nytt ankare – från fast kronkurs till inflationsmål (Looking for a new anchor. From a fixed exchange rate to an inflation target), SNS Förlag. Ekonomisk Debatt (1996), ”Riksbanken och penningpolitiken” (the Riksbank and monetary policy), Proceedings at the Swedish Economics Association 21 February 1996, no. 4. Jansson, Per (2014), ”Swedish monetary policy after the financial crisis – myths and facts”, speech at SvD Bank Summit, 3 December, Sveriges Riksbank. Goodfriend, Marvin (2016), ”The case for unencumbering interest rate policy at the zero bound”, essay presented at the conference “Designing Resilient Monetary Policy Frameworks for the Future”, Jackson Hole, Wyoming, 25-27 August. LO (1994), ”Sverige har råd!” (Sweden can afford it), information paper, the Swedish Trade Union Confederation.