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A checklist for well-balanced monetary policy – a proposal and an illustration

Author

Listed:
  • Almerud, Jakob
  • Claussen, Carl Andreas
  • Kilström, Matilda

Abstract

Central banks with inflation targets often face complex trade-offs. In this article, we present a checklist that can support navigating these. The checklist consists of seven general principles. These state, for instance, that monetary policy should stabilise inflation at the target while remaining flexible, robust and predictable. Each principle is supported by more specific checkpoints. The checklist helps ensure that trade-offs are made in a systematic and transparent way, based on careful analysis. It sets clear requirements for logic and consistency and helps ensure that critical aspects are not overlooked. We demonstrate the practical application of the checklist by presenting an example of its use in a recent policy round at the Riksbank.

Suggested Citation

  • Almerud, Jakob & Claussen, Carl Andreas & Kilström, Matilda, 2026. "A checklist for well-balanced monetary policy – a proposal and an illustration," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue 2026, pages 21-53.
    • Handle: RePEc:zbw:espost:344262
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    File URL: https://www.econstor.eu/bitstream/10419/344262/1/2026-1-a-checklist-for-a-well-balanced-monetary-policy.pdf
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    Keywords

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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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