We can note that the real repo rate is presently below zero, and according to the Riksbank’s forecast it is not expected to be above zero until the end of this year. If the forecast proves correct, the real repo rate will have been negative for a two-year period – this is very unusual in an historical perspective. The Riksbank’s assessment is that a long-term normal level for the real repo rate is around 2 per cent. 9 Seen from this perspective, the repo rate path thus indicates a very expansionary monetary policy. We have previously seen that in April the market was expecting a lower nominal repo rate in relation to the Riksbank’s forecast. Figure 6 shows that this also appeared to apply to the real repo rate. Figure 6 The Riksbank’s real repo rate forecast Per cent  Note. See footnote 8 for a description of the calculation of the real repo rate expectations. Sources: Reuters EcoWin, TNS SIFO Prospera and the Riksbank. 8  The real repo rate forecast is calculated as a mean value of the Riksbank’s repo rate forecast for the coming year minus the inflation forecast (CPIF) for the corresponding period. Prospera’s interest rate and inflation expectations are based on surveys carried out on 28 April and 28 April–7 May respectively. Interpolation has been used for the interest rate and inflation expectations to produce the expected repo rate for the coming year and inflation expectations for the corresponding period.
8  BIS Review 34/2002  Chart 1: average committee scores over time1  A ve rag e s core 80 70  Tre nd  60 50  Score  40 30 20  In d iv id u a l games  10  In d iv id u a l games  C o m m it t e e games  0 0  1  2  3  4  5  6 7 8 9 10 G a m e Nu m b e r  11  12  13  14  15  16  1  Players are scored according to their ability to keep inflation close to a pre-specified target and to minimise output fluctuations across each of the sixteen, ten period games. The Chart shows the evolution of scores over time: • For the individual games, numbers 1-4 and 13-16, each diamond represents the mean individual score across the 170 participants. • For the committee games, numbers 5-12, the diamonds represent the mean score across the 34 committees. In these stages, the five members of the committee vote in each period and the ‘majority’ - or more precisely - the median interest rate is set. Each committee is then scored according to this median outcome.