This capacity is in turn dependent on how open a country is to impulses from outside, which is determined by the obstacles to ideas, products, services and production factors moving freely across borders. The capacity to reconsider regulations and institutions so that changes can be adopted is an important part of this openness. The negative experiences of the closed economies during the interwar period led to trade barriers being successively lowered after the Second World War. A gradual increase in free trade stimulated the global economy and this was particularly important for small countries like Sweden. Freedom for savers to choose the country in which to save was also introduced in many countries. The obstacles to ideas, products, services and production factors moving freely across borders has declined further  1  The importance of price and budget stability for productivity growth has been demonstrated, for instance, by William Easterley in “When is stabilisation expansionary”, the World Bank, Dec 1995. 4  BIS Review 37/2003  during the 1990s, partly due to our EU membership and this ought to have had a positive effect on factor productivity. Internationalisation has thus contributed to an increasingly large part of the corporate sector becoming exposed to competition. Increased competition means that companies must become more efficient and cost-conscious, which in turn should have a positive effect on productivity. In addition, a new Competition Act was introduced in Sweden in 1993, containing an express ban on anti-competitive cooperation between companies and a ban on abuse of a dominant position.
Because even if one has prepared the way, changes often mean that all those involved must undergo a period of “learning by doing” before everything falls into place. This applies not least to us, I would like to emphasise. The changes also mean, in particular our own interest rate forecast, that we are now sticking out our necks and opening up for criticism more than before. When we describe our policy it is no longer in the form of a simple, but perhaps slightly misleading policy rule. This was the way things were before when we used the more easily understood, but less realistic, assumption of an unchanged repo rate. Instead we are painting a more complex picture, the way it actually looks to us who make the decisions. Slightly more complicated on the one hand, but on the other hand more realistic and with significantly better opportunities to evaluate our work! The fact that we are publishing our own forecast for the policy rate also means that it will be very clear when we reconsider our view of what interest rate policy will be needed in the future. It also becomes evident when our assessment differs from that of the market, and these differences often cause a debate. But the fact that we are criticised for changing our minds, or for our views being different from the market view, is hardly a reason to refrain from reporting as honestly as possible what we believe.