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Forecast‐Based Monetary Policy: The Case of Sweden

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  • Per Jansson
  • Anders Vredin

Abstract

Central banks are dominant players in financial markets and economic policy. For both democratic and efficiency reasons, it is important that central banks' actions can be understood, predicted, and evaluated. Inflation‐targeting central banks that publish their forecasts provide unique opportunities for detailed studies of monetary policy based on real‐time data. This paper demonstrates how a central bank's forecasts can be used to identify two different forms of discretionary monetary policy: ‘policy shocks’ (deviations from systematic policy) and ‘judgements’ in forecasting.

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  • Per Jansson & Anders Vredin, 2003. "Forecast‐Based Monetary Policy: The Case of Sweden," International Finance, Wiley Blackwell, vol. 6(3), pages 349-380, November.
    • Handle: RePEc:bla:intfin:v:6:y:2003:i:3:p:349-380
    DOI: 10.1111/j.1367-0271.2003.00122.x
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    References listed on IDEAS

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    Cited by:

    1. Lundholm, Michael, 2010. "Sveriges Riksbank's Inflation Interval Forecasts 1999-2005," Research Papers in Economics 2010:11, Stockholm University, Department of Economics.
    2. Bylund, Emma & Iversen, Jens & Vredin, Anders, 2023. "Monetary policy in Sweden after the end of Bretton Woods," Working Paper Series 429, Sveriges Riksbank (Central Bank of Sweden).
    3. Lars E.O. Svensson, 2006. "The Instrument-Rate Projection under Inflation Targeting: The Norwegian Example," Working Papers 75, Princeton University, Department of Economics, Center for Economic Policy Studies..
    4. Lundholm, Michael, 2010. "Are Inflation Forecasts from Major Swedish Forecasters Biased?," Research Papers in Economics 2010:10, Stockholm University, Department of Economics.

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