According to one theory, similar mechanisms could emerge in response to an asymmetrical policy vis-à-vis asset prices. If central banks took action to stop asset prices falling below a certain level, the players in financial markets might attach less importance to a rigorous analysis of economic fundamentals. The strategy of waiting for bubbles to burst by themselves might then establish a climate that actually encouraged bubbles. This must of course be regarded as an unproven but interesting theory, and it certainly calls for a great deal more careful thought. Conclusion In my speech today I have dealt with some issues that at the moment are being debated particularly in the USA. This is not due to a special interest in developments in the USA but because the conditions 5  BIS Review 128/1999  under which monetary policy is pursued in the USA and Sweden are quite similar. Many of the problems and issues that are being addressed there are also of interest here, or may be so in the future. Therefore I feel that we have something to learn from them. As I see it, one important lesson is that monetary policy, at least today, should take a greater interest in the “long boom” than the “new economy”.
In other words, I think that it is a wiser basic strategy to concentrate on making sure that the economy does not overheat - which leads to recessions - than to count on large hypothetical improvements in future productivity which, if they do not materialise, will involve loss of credibility and a drastic slowing down of the economy similar to those we have so often witnessed in the last couple of decades. I have also discussed various aspects of fluctuations in asset prices. One encouraging conclusion that I think we can draw in this connection is that the present monetary policy framework in Sweden, with built-in inflation targets, provides a reasonable basis for tackling any problems that may arise. BIS Review 128/1999  6