In the latest issue of its report “Wage Formation in Sweden”, the National Institute of Economic Research assesses this rate to be around 7 per cent at present, but that it will fall to around 6 per cent in the years immediately ahead (see Wage Formation in Sweden 2012, National Institute of Economic Research). According to a calculation by Lars Svensson of how the deviation between the actual inflation rate and the inflation target affects unemployment, the mid-point of the Riksbank’s estimated interval is at 5.5 per cent (see “Correction of the Riksbank’s estimate of the long-run sustainable unemployment rate”, Appendix 2, minutes of the monetary policy meeting, July 2012). BIS central bankers’ speeches  9  have levelled out. This differs from the situation in Norway where prices continue to increase, and in Denmark, where there has been a significant fall in prices. Figure 8. Real house prices Index, 1995=100 300  300 Norway Finland  270  270  Denmark Sweden  240  240  210  210  180  180  150  150  120  120  90  90 95  97  99  01  03  05  07  09  11  Sources: Statistics Sweden and national sources. Figure 9.
Karolina Ekholm: Monetary policy, business cycle stabilisation and macroprudential policy Speech by Ms Karolina Ekholm, Deputy Governor of the Sveriges Riksbank, to a meeting at the Confederation of Swedish Enterprise, Stockholm, 13 March 2013. *  *  *  The views expressed in this speech are my own and are not necessarily shared by the other members of the Executive Board of the Riksbank. I would like to thank Kerstin Hallsten, Kerstin af Jochnick, Cecilia RoosIsaksson, Lars E. O. Svensson, Anders Vredin and Barbro Wickman-Parak for their comments and Magnus Wiberg for help with drafting the speech. As I am sure most of you know, I have in recent years advocated a more expansionary monetary policy than the policy that has actually been conducted. That I have done so recently, when the growth of the Swedish economy has been relatively weak, is perhaps not so surprising. On the other hand, it may be more difficult to understand the reasons for my stance in 2010, when the Swedish economy had growth rates of over 5 per cent. However, as I intend to explain today, I believe that demand has been too low in Sweden ever since the global financial crisis seriously affected the Swedish economy in the autumn of 2008. The low level of demand is ultimately the result of weak economic development around the world, which is subduing the demand for Swedish exports and making households and companies more pessimistic.