And arguably, since the crisis, that relationship has become more important to our understanding of inflationary pressure in the economy. Before the crisis the supply side of the economy posed far fewer puzzles. Productivity grew at a relatively steady rate around 2% a year and we had, or thought we had, a relatively clear idea of labour supply. The MPC certainly did not need to give as much attention to the evolution of the supply side of the economy as its present day counterpart. That is not just my recollection as the Treasury representative on the Committee from 2002 to 2007. It is borne out by the minutes – the rate of mentions of ‘supply’ and ‘productivity’ in the minutes of MPC meetings in the past decade has been about twice that in the decade prior to the crisis. As my colleague, Ben Broadbent has pointed out, pre-crisis the MPC could navigate primarily by demand and output. Changes in unemployment lagged changes in demand and output and, in the UK at least, the relationship between pay and unemployment appeared relatively stable. 5  The post-crisis uncertainty over productivity and the dependence of economic growth on labour supply has, as Ben suggests, led the MPC to depend more on the labour market as a guide to spare capacity in the economy and on the relationship between pay and unemployment as a guide to domestically generated inflationary pressure in the pipeline.
Lars Nyberg: Developments in the property market Speech by Mr Lars Nyberg, Deputy Governor of Sveriges Riksbank, at the seminar on properties, Malmö, 2 September 2003. *  *  *  I would like to begin by thanking you for the opportunity to come to Malmö and speak about the Riksbank's view of developments in the property market. Of course, these developments are not only of interest to those of us present today. They are important to all people, as movements in property prices have significance both for the real economy and financial developments in Sweden. When property prices rise, we feel more financially secure and increase our consumption, which leads to a rise in employment and growth. We might even borrow a bit more from the bank if we can. Normally, there is no harm in this. But there is a limit, of course, to the burden of debt households can bear without giving rise to worrisome risks. Should the debt of commercial property companies also swell, it could entail risks for the stability of the entire banking system, a point that was illustrated so well during the crisis at the beginning of the 1990s. On account of this, the Riksbank monitors developments in the property market carefully. We usually divide it into two segments, which give rise to different questions and reflections. The first segment is the housing market. Since 1997, housing prices have risen by just over 50 per cent, measured in current prices.