Per Jansson: The gap in the monetary policy debate

Speech by Mr Per Jansson, Deputy Governor of the Sveriges Riksbank, at the Danske Bank, Stockholm, 12 December 2023.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Accompanying slides to the speech

When people communicate, it is easier if they speak the same language. It is possible to manage fairly well with gestures, mimes and good will, but without a common language it becomes difficult to conduct in-depth discussions and deal with more complicated issues. There is a considerable risk of misunderstandings and confusion.

The point I intend to make here today is that the problem is fairly similar when monetary policy is discussed. There is often a significant difference between views of monetary policy in the general debate, as it is conducted and reproduced in the media, and how it is viewed in research and actual policy. This may concern very central aspects, such as the preconditions for monetary policy, why the Riksbank has the task it has, and sometimes even what that task is. I will illustrate this discrepancy by comparing the discussion in the general debate with the conclusions drawn in the latest formal evaluation of monetary policy, made by three Swedish academic economists and commissioned by the Riksdag Committee on Finance.

Price stability objective more clearly defined in the new Act

But let me start at a slightly different end. On 1 January this year, almost a year ago, a new Sveriges Riksbank Act entered into force. This may not have been particularly noticeable so far, but I would like to highlight a couple of changes in the Act that may facilitate the monetary policy discussion. This includes the way the price stability target is formulated and the forms for the evaluation of monetary policy.