The Swedish market is too small for companies from other countries to find it profitable to manufacture products especially for us. There may therefore be reason to consider how competition legislation may have greater effects in practice. Increased competition benefits the economy in two ways: by initially contributing indirectly to lower inflation and by stimulating efficiency and new ways of thinking. I believe that one of the problems with the competition legislation may be that the incentives to follow the law are too weak. It is always individuals (company managers, owners) who prepare and make decisions on limiting competition against the provisions of the law, but there is little personal responsibility in the current legislation. Merely sentencing the companies to fines risks creating a situation where it is ultimately the consumers that have to pay a second time; first the cartels' higher prices and then the cost of the cartels' fines. In the USA, it is the responsible decision-makers that are penalised when breaches of the law come to light. The Swedish Competition Authority expresses the opinion in its response to the report by the committee on combating cartels (SOU 2001:74) that the possibility of personal penal responsibility should be considered in Sweden. It makes comparisons with other economic crimes that lead to prison sentences. Increased mobility for ideas, goods, services, work and capital during the 1990s, partly through our membership of the EU, has probably also had a positive effect on growth.
2  BIS central bankers’ speeches  Important to follow the international debate One aspect which has been debated a great deal both in Sweden and internationally, and which I do not intend to highlight here, is the level of the inflation target. That issue has recently been discussed quite thoroughly by some of my colleagues, and I do not have much more to add.5 I would just like to say briefly that if we are going to discuss a change in the target level, then I, like my colleagues, have greater sympathy for the argument in the international debate that central banks should raise their inflation targets than for the argument in the Swedish debate that the inflation target should be lowered. The main reason for this is the motive usually stated as the main justification for a rise – that if the target is too low, or if inflation expectations are permanently too low for some other reason, then the policy rate will hit its lower limit more often and for longer periods.6 This means that monetary policy in the future would find it harder to counteract a recession. However, it is too early today to draw the conclusion that 2 per cent is too low a level for the inflation target, and the discussion needs to continue.7 Nor do I intend to say anything about the issue debated both in Sweden and internationally as to whether monetary policy should be used to actively attempt to counteract the accumulation of financial imbalances.