We have had considerable benefit of households and companies, savers and investors, expecting a future rate of inflation that is on a reasonably low level and that their expectations are more or less consistent with one another. This has contributed to a completely different stability in price setting and wage formation over the past two decades than in the two decades prior to this, which has in turn contributed to inflation falling at the same time as we have had more stable and much higher real wages on average. That high and fluctuating inflation has disappeared as a disturbing factor should also have meant that financial decisions by households and companies have in general become simpler and better. But the key to this type of development is a joint anchoring of inflation expectations and a condition for this is that the inflation target of 2 per cent is perceived as credible. This is the problem that has marked the Riksbank's monetary policy in recent years. In January 2015, when I became a member of the Executive Board, we were in an unfortunate situation where inflation expectations in the longer run were losing their anchorage around the 2 per cent target. Monetary policy had been expansionary for a long time and further measures were needed to strengthen confidence in the target and to send very clear signals about the Riksbank’s intentions to bring inflation back to 2 per ce nt.
To begin with, households are more negatively affected by an expansionary monetary policy that increases inflation if they have a relatively large share of assets that have poor or little protection against inflation. Cash is of course the most obvious example, even if it may in this context be of less significance for the wealth distribution, given how the use of cash has declined in Sweden. The real value of all assets and liabilities is of course affected by how high inflation is and I have earlier mentioned the redistribution between borrowers and lenders as an effect of an unexpectedly high or low inflation rate. An unexpected increase in inflation, for instance, that monetary policy has become more e xpansionary than expected, reduces the real value of assets and liabilities. This can, for instance, benefit households with relatively large debts on houses and  8 [14]  apartments, but disadvantage low income households who rent their homes. Households with large financial assets are also disadvantaged, but they are perhaps more used to, and better able to, adapting their assets to avoid the inflation risk. Hence, to study the distributional effects linked to increased capital income, it would be interesting to see how assets and liabilities are distributed between households. When it comes to liabilities, there are relatively good statistics available, but with regard to the distribution of various assets, we are unfortunately fumbling in the dark to some extent.