The Swedish Experience of an Inflation Target
The paper gives a brief account of the Swedish experience of an inflation target in a floating exchange rate regime; identifies, documents and discusses the current problems in Swedish monetary policy and their origins; suggests what can be done to remedy the problems; and draws some general conclusions. The two main current problems are the lack of credibility of the target and the significant risk that the target will be missed. The reasons for the lack of credibility include the fiscal situation, the institutional set-up of monetary policy, the political division about monetary policy, and the insufficient transparency of and commitment to the current inflation-targeting policy.
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References listed on IDEAS
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- Lars E. O. Svensson, 1994.
"Estimating and Interpreting Forward Interest Rates: Sweden 1992-1994,"
IMF Working Papers
94/114, International Monetary Fund.
- Lars E.O. Svensson, 1994. "Estimating and Interpreting Forward Interest Rates: Sweden 1992 - 1994," NBER Working Papers 4871, National Bureau of Economic Research, Inc.
- Svensson, L.E.O., 1994. "Estimating and Interpreting Foreward Interest Rates: Sweden 1992-1994," Papers 579, Stockholm - International Economic Studies.
- Svensson, L.E.O., 1993.
"Term, Inflation and Foreign Exchange Risk Premia: A Unified Treatment,"
548, Stockholm - International Economic Studies.
- Lars E.O. Svensson, 1993. "Term, Inflation, and Foreign Exchange Risk Premia: A Unified Treatment," NBER Working Papers 4544, National Bureau of Economic Research, Inc.
- Svensson, Lars E O, 1994.
"The Simplest Test of Inflation Target Credibility,"
CEPR Discussion Papers
940, C.E.P.R. Discussion Papers.
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