“The results of the policy have been devastating for the Swedish economy” The picture that critics like to paint is of a high repo rate pushing down demand and creating a more or less deflationist situation in the Swedish economy. This is something that some international analysts in particular seem to have latched onto, interpreting the situation in Sweden today to be similar to that in Japan in the 1990s.19  16  See, for instance, Schularick and Taylor (2012) and Jordà, Schularick and Taylor (2013). 17  See, for example, Jansson (2014). 18  In some cases, the critics have also had diametrically opposed views. Paul Krugman appears to think that Sweden has probably already had a housing bubble for some time, and that as it is too late to do anything about it, the Riksbank should not conduct a policy that leans against the wind (see Andrén Meiton, 2014). Lars Svensson, on the other hand, appears to think that there is no great risk of a housing bubble building up (see Svenska Dagbladet newspaper, 2014a) and that a policy that leans against the wind for this reason is not needed, but is harmful. 19  See, for instance, Krugman (2014a, 2014b) who as well as likening Sweden to Japan, has also characterised monetary policy in Sweden as an example of ”sadomonetarism”. Among Swedish critics it is less common to make comparisons with Japan.
Mr. George conveys his reflections on the development of bond market yields over recent years Remarks by the Governor of the Bank of England, Mr. E.A.J. George, at the Euromoney International Bond Congress held in London on 25/2/97. I’m honoured to have been invited to open this 3rd Euromoney International Bond Congress. I remember with great pleasure launching your initial Congress in October 1994 in the Barbican. It is an even greater pleasure now to launch the QEII! That first Congress was an ambitious and imaginative venture. But it immediately established itself as a major event in the international financial calendar. I congratulate Euromoney on that achievement, and, to judge from the program, on organising an even bigger and better Congress on this third occasion. I am delighted to welcome you all here. I remember our debate at that first Congress particularly well, Mr. Chairman. I remember it because I looked up my notes over the weekend! The context then was one in which yields had fallen very sharply, to unusually low levels, almost everywhere during 1993 only to back up just as sharply during 1994. We concluded, I think, that none of us really understood either the earlier strength of the market or its subsequent weakness! But we had a very enjoyable two days of discussion.