The debate in Sweden is ahead of the international debate There is reason to believe that the experiences we have had in Sweden in recent years mean that we can make useful contributions to the international debate. For quite some time, we have had a discussion on the process of inflation and the conditions for inflation targeting, while this is a relatively new phenomenon in There is also a parallel debate on whether the inflation target should be replaced, for example, with a pricelevel target or a target for nominal GDP. However, I will not address this debate in this speech. 2 See Davies (2017). For the sake of simplicity, I will adopt Davies’ terminology hereafter and refer to the two opinions as the ‘Borio camp’ and the ‘Yellen camp’. Of course, this does not mean that all arguments can be linked to specific statements by Janet Yellen or Claudio Borio. For typical references, see Borio (2017), Borio et al. (2017) and Yellen (2017a, b). 1  2 [20]  most other countries. Almost exactly one year ago, I held a speech where I noted that the long period of below-target inflation had led to a debate in Sweden which had few equivalents abroad. Analysts and observers argued that this development, with inflation persistently below forecast and quite far below the inflation target, indicated that the target was so hard to reach that the Riksbank should abandon the attempt and instead conduct a less expansionary policy aimed at dampening rising household debt and housing prices.
SPEECH DATE:  6 Dec 2017  SPEAKER:  Deputy Governor Per Jansson  VENUE:  Fores, Stockholm  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  The ideological debate on monetary policy – lessons from developments in Sweden∗  These are unusually exciting times to be working at a central bank. Challenges have always been present, of course, but I think that it could be claimed that seldom have they been of such a fundamental nature as they are today. One example is the debate on limiting central banks’ independence that has arisen recently. This has come about after several countries have found themselves unable to conduct monetary policy using policy rate adjustments alone. Instead, they have had to complement this with tools that some observers feel have blurred the boundary between monetary policy and other economic policies. Another example is that technological progress within the area of payments has led to the rapid decline of cash usage in a number of countries, not least Sweden. Whether and how this trend will affect the conditions for conducting monetary policy and whether it provides reason for the central banks to issue electronic money as a complement to physical cash will be the focus of intense discussions in the period ahead. These are important and fundamental issues.