Lars E. O. Svensson's research while affiliated with Stockholm School of Economics and other places

Publications (241)

Article
en The paper discusses how monetary and macroprudential policies can be distinguished, how appropriate goals for the two policies can be determined, whether the policies are best conducted separately or coordinately and by the same or different authorities and how they can be coordinated when desired. The institutional frameworks in Canada, Sweden...
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An obvious cost of “leaning against the wind” is a weaker economy if no (financial) crisis occurs. Possible benefits are lower probabilities and smaller magnitudes of crises. A second cost—less obvious, previously overlooked, but higher—is a weaker economy if a crisis occurs. For representative estimates, costs exceed benefits by substantial margin...
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Forward guidance about future policy settings, in the form of a published policy rate path, has for many years been a natural part of normal monetary policy for several central banks, including the Reserve Bank of New Zealand and the Swedish Riksbank. More recently, the Federal Reserve has started to publish FOMC participants' policy rate projectio...
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If inflation expectations become firmly anchored at the inflation target even when average inflation deviates from the target, the long-run Phillips curve becomes nonvertical. During 1997–2011, average inflation expectations in Sweden have been close to the inflation target of 2 percent, whereas average inflation has fallen short of the target by 0...
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The monetary policy mandate for the Federal Reserve and of the Riksbank are essentially the same and boil down to stabilizing inflation around the inflation target and employment or unemployment around a long-run sustainable rate. The relative weight on stabilizing unemployment or employment versus stabilizing inflation may be close to one. A posit...
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Should inflation targeting involve some leaning against the wind? Sweden provides a case study, since the Riksbank has been leaning against the wind since 2010, stating concerns about risks associated with the household debt-to-income ratio. The cost of this policy in terms of low inflation and high unemployment is high. According to the Riksbank's...
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In the summer of 2010, the Federal Reserve’s and the Swedish Riksbank’s inflation forecasts were below the former’s mandate-consistent rate and the latter’s target, respectively, and their unemployment forecasts were above sustainable rates. Given the mandates of the Federal Reserve and the Riksbank, conditions in both countries clearly called for...
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The Riksbank faces challenges with regard to each of its three core functions, conducting monetary policy with the objective of stabilising inflation around the inflation target and resource utilisation around a sustainable level, promoting a safe and efficient payment system and thereby conducting a policy for financial stability, and managing its...
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This paper specifies a new convenient algorithm to construct policy projections conditional on alternative anticipated policy rate paths in linearized dynamic stochastic general equilibrium (DSGE) models, such as Ramses, the Riksbank’s main DSGE model. Such projections with anticipated policy rate paths correspond to situations where the central ba...
Article
In the summer of 2010, the Federal Reserve's and the Swedish Riksbank's inflation forecasts were below the former's mandate-consistent rate and the latter's target, respectively, and their unemployment forecasts were above sustainable rates. Conditions in both countries clearly called for policy easing. The Federal Reserve maintained a minimum poli...
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The development of the Riksbank's transparency and communication since its independence in 1999 is reviewed. The Riksbank's record on the management of market expectations of future policy rates after the publication of policy-rate paths in February 2007 is examined, with a focus on the exceptional deviations of market expectations from published p...
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What have economists learned about monetary policy over the past 50 years? In economic research, 50 years is a long time. I will actually start in 1967, with Milton Friedman’s presidential address at the meeting of the American Economic Association, so I will only cover about 40 years. I will give a very personal view of what economists have learne...
Chapter
Inflation targeting is a monetary-policy strategy characterized by an announced numerical inflation target, an implementation of monetary policy that gives a major role to an inflation forecast that has been called forecast targeting, and a high degree of transparency and accountability. It was introduced in New Zealand in 1990, has been very succe...
Article
I discuss what determines the effective lower bound (ELB) for the policy rate and argue that the ELB is not hard, but rather soft, and that it is probably slightly negative. I argue that, at the ELB, current output can be increased by (i) monetary policy that extends the period of credibly low policy rates and generates inflation expectations, (ii)...
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We show how to construct optimal policy projections in Ramses, the Riksbank's open-economy medium-sized DSGE model for forecasting and policy analysis. Bayesian estimation of the parameters of the model indicates that they are relatively invariant to alternative policy assumptions and supports our view that the model parameters may be regarded as u...
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Evaluating inflation-targeting monetary policy is more complicated than checking whether inflation has been on target, because inflation control is imperfect and flexible inflation targeting means that deviations from target may be deliberate in order to stabilize the real economy. A modified Taylor curve, the forecast Taylor curve, showing the tra...
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I report some personal views and reflections on transparency experiences and transparency challenges following my first year and a half as Deputy Governor at Sveriges Riksbank regarding (1) flexible inflation targeting, (2) the role of transparency in inflation targeting and committee decisions on instrument-rate paths, (3) the management of intere...
Article
The aim of the paper is to check the influence of the degree of forward-lookingness of economic agents on the optimal monetary policy rules, using several versions of a small, highly aggregated structural model describing the transmission mechanism in the spirit of the New Keynesian School. We show the optimal policy rule with the monetary authorit...
Article
We show how to construct optimal policy projections in Ramses, the Riksbank’s openeconomy medium-sized DSGE model for forecasting and policy analysis. Bayesian estimation of the parameters of the model indicates that they are relatively invariant to alternative policy assumptions and supports that the model may be regarded as structural in a stable...
Article
We explore the implications of current account adjustment for monetary policy within a simple two-country DSGE model. Our framework nests Obstfeld and Rogoff's (2005) static model of exchange rate responsiveness to current account reversals. It extends this approach by endogenizing the dynamic adjustment path and by incorporating production and nom...
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Full-text available
Este trabajo estudia el diseño de política monetaria óptima bajo incertidumbre en un modelo de equilibrio general dinámico y estocástico. Se utiliza un enfoque de Markov jump-linear-quadratic (MJLQ) para estudiar el diseño de la política, aproximando la incertidumbre por medio de distintos modelos discretos de cadenas de Markov, y tomando aproximac...
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Full-text available
This paper studies the design of optimal monetary policy under uncertainty using a Markov jump-linear-quadratic (MJLQ) approach. To approximate the uncertainty that policymakers face, the authors use different discrete modes in a Markov chain and take mode-dependent linear-quadratic approximations of the underlying model. This allows the authors to...
Article
Monetary policies of the ECB and US Fed can be characterised by Taylor rules, that is both central banks seem to be setting rates by taking into account the output gap and inflation. We also set up and tested Taylor rules which incorporate money growth and the euro-dollar exchange rate, thereby improving the fit between actual and Taylor rule based...
Article
The ECB and the Eurosystem should normally take asset-price movements and potential asset-price bubbles into account only to the extent these are deemed to have an impact on the in‡ation and output-gap forecasts that should guide monetary policy. Asset prices should not be separate target variables, additional to in‡ation and the output gap. The ex...
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Full-text available
We study the problem of a policymaker who seeks to set policy optimally in an economy where the true economic structure is unobserved, and policymakers optimally learn from their observations of the economy. This is a classic problem of learning and control, variants of which have been studied in the past, but little with forward-looking variables...
Article
An independent central bank can manage its balance sheet and its capital so as to commit itself to a depreciation of its currency and an exchange rate peg. This way, the central bank can implement the optimal escape from a liquidity trap, which involves a commitment to higher future inflation. This commitment mechanism works even though, realistica...
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Full-text available
Central banks target CPI inflation; independent central banks are concerned about their balance sheet and the level of their capital. The first fact makes it difficult for a central bank to implement the optimal escape from a liquidity trap, because it undermines a commitment to overshoot the inflation target. We show that the second fact provides...
Article
The introduction of inflation targeting has led to major progress in practical monetary policy. Nevertheless, inflation-targeting central banks can make substantial additional progress by being more specific, systematic, and transparent about their operational objectives (in the form of using an explicit intertemporal loss function), their forecast...
Article
Forecasts are an inherent part of economic science and the quest for perfect foresight occupies economists and researchers in multiple fields. The release of economic forecasts (and its revisions) is a popular and often publicized event, with a multitude of institutions and think-tanks devoted almost exclusively to that task. The European Central B...
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This paper demonstrates how time consistency of the Ramsey policy-the optimal fiscal and monetary policy under commitment-can be achieved. Each government should leave its successor with a unique maturity structure for nominal and indexed debt, such that the marginal benefit of a surprise inflation exactly balances the marginal cost. Unlike in earl...
Article
This paper calculates indices of central bank autonomy (CBA) for 163 central banks as of end-2003, and comparable indices for a subgroup of 68 central banks as of the end of the 1980s. The results confirm strong improvements in both economic and political CBA over the past couple of decades, although more progress is needed to boost political auton...
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Full-text available
We examine optimal and other monetary policies in a linear-quadratic setup with relatively general forms of model uncertainty. The forms of uncertainty our framework encompasses include: simple i.i.d. model deviations; serially correlated model deviations; estimable regime-switching models; more complex structural uncertainty, such as uncertainty a...
Article
In their paper "Targeting versus Instrument Rules for Monetary Policy," McCallum and Nelson critique targeting rules for the analysis of monetary policy. Their arguments are rebutted here. First, McCallum and Nelson's preference to study the robustness of simple monetary policy rules is no reason at all to limit attention to simple instrument rules...
Article
The main result of Morris and Shin (2002) (restated in papers by Amato, Morris, and Shin (2002) and Amato and Shin (2003) and commented upon by Economist (2004)) has been presented and interpreted as an anti-transparency result: more public information can be bad. However, some scrutiny of the result shows that it is actually pro transparency: exce...
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Full-text available
We outline a method to provide advice on optimal monetary policy while taking policymakers’ judgment into account. The method constructs optimal policy projections (OPPs) by extracting the judgment terms that allow a model, such as the Federal Reserve Board staff economic model, FRB/US, to reproduce a forecast, such as the Greenbook forecast. Given...
Article
What generates persistence in ination? Is ination persistence structural? This paper investigates learning as a potential source of persistence in ination. The paper focuses on the price-setting problem of …rms and presents a model that nests structural sources of persistence (indexation) and learning. Indexation is typically necessary under ration...
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I modify the uniform-price auction rules in allowing the seller to ration bidders. This allows me to provide a strategic foundation for underpricing when the seller has an interest in ownership dispersion. Moreover, many of the so-called "collusive-seeming" equilibria disappear.
Article
I modify the uniform-price auction rules in allowing the seller to ration bidders. This allows me to provide a strategic foundation for underpricing when the seller has an interest in ownership dispersion. Moreover, many of the so-called "collusive-seeming" equilibria disappear.
Article
The ECB and the Eurosystem should take past, present, and predicted future oil-price movements into account in its monetary policy depending on how these movements affect the inflation and output-gap forecasts that should guide monetary policy. Oil price movements have complex effects on these forecasts, so the impact of oil price movements on poli...
Article
"Forecast targeting", forward-looking monetary policy that uses central-bank judgment to construct optimal policy projections of the target variables and the instrument rate, may perform substantially better than monetary policy that disregards judgment and follows a given instrument rule. This is demonstrated in a few examples for two empirical mo...
Article
The paper focuses on satisfaction with income and proposes a utility model built on two value systems, the `Ego' system - described as one own income assessment relatively to one own past and future income - and the `Alter' system - described as one own income assessment relatively to a reference group. We show how the union of these two value syst...
Article
The optimal escape from a liquidity trap involves generating private-sector expectations of a higher future price level and higher future inflation. This lowers the real interest rate and reduces the recession during the liquidity trap. The problem, emphasized by Krugman, is that central-bank promises of a higher future price level may not be credi...
Article
Existing proposals to escape from a liquidity trap and deflation, including my "Foolproof Way," are discussed in the light of the optimal way to escape. The optimal way involves three elements: (1) an explicit central-bank commitment to a higher future price level; (2) a concrete action that demonstrates the central bank's commitment, induces expec...
Article
This paper examines inflation indicators for the euro area by studying the relationship between inflation, output, money and interest rates, using data spanning 1980–2001. The central finding is that both the output gap and the real money gap (the difference between the real money stock and the long-run equilibrium real money stock) contain conside...
Article
The optimal policy response to a low-probability extreme event is examined. A simple policy problem is solved for a sequence of different loss functions: quadratic, combined quadratic/absolute-deviation, absolute-deviation, combined quadratic/constant, and perfec- tionist. The paper shows that, under some simplifying assumptions, each of these loss...
Article
The ECB has missed an opportunity to thoroughly modernize its monetary-policy strategy and reach best international practice. The change in the definition of price stability to "below but close to 2%" is an improvement, but some completely unnecessary ambiguity remains. The reduction of the prominence of monetary aggregates is in the right directio...
Article
We examine to what extent variants of inflation-forecast targeting can avoid stabilization bias, incorporate history-dependence, and achieve determinacy of equilibrium, so as to reproduce a socially optimal equilibrium. We also evaluate these variants in terms of the transparency of the connection with the ultimate policy goals and the robustness t...
Article
The Eurosystem should modify its definition of price stability to a symmetric and unambiguous inflation target, at the level of 1.5 or 2% per year. It should abandon its two-pillar strategy and adopt the superior international-best-practice strategy of flexible inflation targeting.
Article
The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and under commitment. The private sector is assumed to have more information than the policymaker. Certainty equivalence holds for the optimal reaction fu...
Article
This paper proves a certainty equivalence result for optimal policy under commitment with symmetric partial information about the state of the economy in a model with forward-looking variables. This result is used in our previous paper, Indicator Variables for Optimal Policy,' which synthesizes what is known about the case of symmetric partial info...
Article
A new strand of macroeconomic literature examines the relationship between learning and monetary policy-how monetary policymakers learn about the economy as they try to achieve their goals, how the public learns about policymakers' objectives, and how the public's learning, in turn, changes the way monetary policy works. An Atlanta Fed conference i...
Article
The Eurosystem's definition of price stability, "HICP increases below 2%," is ambiguous and asymmetric, and less effective as an anchor for inflation expectations than a point inflation target. A speech of Otmar Issing's in Milan, June 2002, can be interpreted as a modification of the definition as "HICP inflation of 1-2%." This would make the defi...
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Full-text available
The Centre for Monetary Economics (CME) at the Norwegian School of Management BI has for the third time invited a committee of economists for Norges Bank Watch, with the objective to evaluate the monetary-policy regime in Norway and Norges Bank’s conduct of monetary policy. The new committee for Norges Bank Watch 2002 consists of Professor Lars E.O...
Article
This paper proves a certainty equivalence result for optimal policy under commitment with symmetric partial information about the state of the economy in a model with forwardlooking variables. This result is used in our previous paper [9], which synthesizes what is known about the case of symmetric partial information, and derives useful general fo...
Article
This Paper argues that inflation-targeting central banks should announce explicit loss function with numerical relative weights on output-gap stabilization and use and announce optimal time-varying instrument-rate paths and corresponding inflation and output-gap forecasts. Simple voting procedures for forming the Monetary Policy Committee’s aggrega...
Article
n and volatility of the external valueofthekrona,theexchangerate(theinternal value of the krona, the reciprocal of the general price level, has been more stable than ever). Although the krona's external value has depreciated quite a bit since mid 2000, the average depreciation from Brie...ng paper for the Committee on Economic and Monetary Aairs (E...
Article
The paper discusses how current inflation targeting should be modeled, and argues that it is better represented as a commitment to a targeting rule (a rule specifying operational objectives for monetary policy or a condition for the target variables), than as a commitment to a simple instrument rule (like a Taylor rule).
Article
Monetary policy can achieve average inflation equal to a given inflation target and, at best, a good compromise between inflation variability and output-gap variability. The complex transmission mechanism, varying lags and strength of the effects through different channels, unpredictable shocks and inherent uncertainty prevent any fine-tuning. Mone...
Article
A reform of the Eurosystem's inferior monetary-policy strategy is increasingly urgent, as noted by a number of observers. For instance, a recent extensive CEPR report finds the that the prominent first pillar of the Eurosystem's strategy, the money-growth indicator, "looks increasingly ridiculous, giving perverse signals that the ECB probably ignor...
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Full-text available
ayments across di#erent individuals and institutions is minimized. For familiar reasons, this should be generally beneficial for the allocation of resources in the economy. Some, however, fear that the job of central banks will be complicated by improvements in the e#ciency of financial markets, or even that the ability of central banks to influenc...
Article
Most recent research on monetary-policy rules is restricted to consider a commitment to simple instrument rules, where the central-bank instrument is a simple function of available information about the economy, like the Taylor rule. However, a commitment to a simple instrument rule appears inadequate as a description of current goal-directed and f...
Article
Using a small empirical model of inflation, output, and money estimated on U.S. data, we compare the relative performance of monetary targeting and inflation targeting. The results show monetary targeting to be quite inefficient, yielding both higher inflation and output variability. This is true even with a nonstochastic money demand formulation....
Article
In May 2000, the Treasurer/Minister of Finance invited me to review the operation of monetary policy in New Zealand and provided me with the Terms of Reference. In undertaking the review, I have read the wide range of submissions provided to me and have met with a number of submitters and other interested parties. I visited New Zealand for two week...
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reliable. It is much too early to take them seriously and, as often, more research is required before we can give any weight to the ...ndings. A revised version of comments presented to the First ECB Central Banking Conference, Why Price Stability?, Frankfurt, November 2--3, 2000. Incidentally, if the results and these curves are taken seriously, i...
Article
Seitz and TÎdter argue, counter to Svensson, that the P* model provides a rationale for money-growth targeting. In particular, they argue that 'money growth targeting is a special form of inflation forecast targeting based on a "limited" information set. In contrast to "full information" inflation forecast targeting, money growth targeting is likel...
Article
The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and under commitment. An example of optimal monetary policy with a partially observable potential output and a forward-looking indicator is examined. The...
Article
ange is announced around the point Brie...ng paper for the Committee on Economic and Monetary Aairs (ECON) of the European Parliament for the quarterly dialogue with the President of the European Central Bank. I thank Annika Andreasson for secretarial and editorial assistance. Expressed views and any errors are solely my own responsibility. target,...
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[10]. See Alesina, Blanchard, Gal, Giavazzo and Uhlig [1], Gali [4] and Blinder, Goodhart, Hildebrand, Lipton and Wyplosz [2] for recent very insightful discussion and scrutiny. 1 These reserve requirements are completely unnecessary (see Goodfriend and King [6] for a more detailed discussion). Canada, New Zealand, Sweden, and the U.K. have no expl...
Article
Frequently used so-called forecast-based instrument rules are shown to correspond to a problematic intertemporal loss function. This loss function is problematic because it is timeinconsistent, arbitrary, and (for the most common form of forecast-based instrument rules) does not incorporate any explicit concern for output-gap stability. The time-in...
Article
The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and under commitment. An example of optimal monetary policy with a partially observable potential output and a forward-looking indicator is examined.The o...
Article
Full-text available
this paper was presented at Bank of Japan's Ninth International Conference, "The Role of Monetary Policy under Low Inflation: Deflationary Shocks and Their Policy Responses," held in Tokyo, July 3--4, 2000. I thank my discussants, Glenn Stevens and Job Swank, and Claes Berg, Ben Bernanke, Peter Bofinger, Guy Debelle, Stefan Gerlach, Charles Goodhar...
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tside the Euro area, information Brie...ng paper for the Committee on Economic and Monetary Aairs (ECON) of the European Parliament for the quarterly dialogue with the President of the European Central Bank. I thank Annika Andreasson for secretarial and editorial assistance. Expressed views and any errors are solely my own responsibility. 1 As many...
Article
This paper studies the relationship between inflation, output, money and interest rates in the euro area, using data spanning 1980--2000. The P model is shown to have considerable empirical support. Thus, the "price gap" or, equivalently, the "real money gap" (the gap between current real balances and long-run equilibrium real balances), has substa...
Chapter
The purpose of this chapter is to provide an up-to-date discussion of monetary policy with ‘price stability’ as the primary objective. The chapter discusses how ‘price stability’ can be defined, and how price stability can be maintained in practice. It also discusses some lessons for the Eurosystem.
Article
The paper discusses several issues related to how monetary policy should be conducted in an era of price stability. Low inflation (with base drift in the price level) and price-level stability (wihtout such base drift) are compared, and a suitable loss function (corresponding to flexible inflation targeting) is discussed, including the index and le...
Article
This paper is a brief evaluation of the Eurosystem's monetary-policy regime after its first year, in particular of the extent to which it is similar to inflation targeting as practiced by an increasing number of central banks. I examine the Eurosystem's goals, framework for monetary-policy decisions and communication with outsiders. Criteria for ev...
Article
The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and under commitment. An example of optimal monetary policy with a partially observable potential output and a forward-looking indicator is examined. The...
Article
The paper examines inflation targeting in a small open economy with forward-looking aggregate supply and demand with microfoundations, and with stylized realistic lags in the different monetary-policy transmission channels. The paper compares strict and flexible targeting of CPI and domestic inflation, and inflation-targeting reaction functions and...
Article
The so-called P* model is frequently used or referred to in discussions of monetary targeting. This gives the impression that the P* model might provide some rationale for monetary targeting or for the monetary reference value used by the Eurosystem. The P* model implies that inflation is determined by the level of and changes in the `real money ga...
Article
This paper calculates indices of central bank autonomy (CBA) for 163 central banks as of end-2003, and comparable indices for a subgroup of 68 central banks as of the end of the 1980s. The results confirm strong improvements in both economic and political CBA over the past couple of decades, although more progress is needed to boost political auton...
Article
This paper calculates indices of central bank autonomy (CBA) for 163 central banks as of end-2003, and comparable indices for a subgroup of 68 central banks as of the end of the 1980s. The results confirm strong improvements in both economic and political CBA over the past couple of decades, although more progress is needed to boost political auton...
Article
This paper discusses how price stability can be defined and how price stability can be maintained in practice. Some lessons for the Eurosystem are also considered. With regard to defining price stability, the choice between price-level stability and low (including zero) inflation and the decisions about the price index, the quantitative target and...
Article
We dene and study transparency, credibility, and reputation in a model where the central banks characteristics are unobservable to the private sector and inferred from the policy outcome. A low-credibility bank optimally conducts a more expansionary policy than a high-credibility bank, in the sense that it induces higher ination, but a less expansi...
Article
The paper discusses the choice between inflation targeting and monetary targeting for the Eurosystem, the announced Eurosystem strategy, the appropriate framework for policy decisions, exchange rate management in the EMU, and Eurosystem accountability and transparency. The announced monetary strategy is deficient, since it proposes a prominent role...

Citations

... This calibration followsTaylor's (1993) calibration multiplied by a smoothing parameter of 0.8, that is consistent with the literature. See, e.g.,Adolfson et al. (2011), Christiano et al. (2005, andSmets and Wouters (2007). ...
... Bu anlamda ortaya çıkan en belirgin görüşlerden ilki, ilgili makamlardan oluşan bir komitenin oluşturulması, ikincisi ise bu görevin bizzat merkez bankasına verilmesidir (Svensson, 2018) ...
... Elle entraine un chômage plus élevé et une inflation plus faible. Mais, elle a été justifiée par des avantages possibles sous la forme d'une probabilité plus faible ou d'une ampleur moindre des crises (financières) futures (Gerdrup et al., 2017;Svensson, 2017;Walsh, 2017). ...
... The explicit modeling framework can truly enable the model to be communicated and improved between developers and users, and the simulation and prediction results of the model can be understood and trusted. In recent years, an increasing number of literatures are making use of the dynamic stochastic general equilibrium (DSGE) model to study the impact of various factors on the macro-economy and monetary policy [1][2][3][4][5][6][7][8]. With the rapid development and popularization of electronic money, an online mode not only provides convenience for payments, but also imperceptibly changes people's payment habits and consumption behavior. ...
... This allows us to compute and plot consistent distribution forecasts—fan charts— of target variables and instruments. Our methods hence extend certainty equivalence and " mean forecast targeting, " where only the mean of future variables matter (Svensson [39] ), to more general certainty non-equivalence and " distribution forecast targeting, " where the whole probability distribution of future variables matter (Svensson [38]). 1 1 The importance of the whole distribution of future target variables was recently emphasized by Greenspan [20] at the 2005 Jackson Hole symposium, with reference to his [19] so-called risk-management approach: ...
... The recognition of these factors and mechanisms connected with this bias may provide a better understanding of spending, pricing, and wage setting (Sousa & Yetman 2016). The use of consumers as price-setters was introduced by Coibion and Gorodnichenko (2015) and is in line with Kumar et al. (2015). This approach assumes the use of consumers as proxy price-setters of households, small entrepreneurs, and managers because of their poor economic knowledge (Kumar et.al. ...
... Moreover, the widespread utilization of quantitative easing through the application of asset-purchasing programs has suggested reducing credit growth (Gross & Semmler, 2019). However, most economic models accept the limited influence of interest-rate control over the price of assets; the required interest-rate change would be too significant, therefore putting in doubt the accomplishment of the other two objectives (Svensson, 2014 Hence Svensson does not recommend leaning against financial instability, suggesting instead to leave the prevention of bubbles to the traditional macroprudential measures of banking supervision. ...
... SNB stejně jako některé další centrální banky (japonská, švédská, dánská a ECB) sáhla k instrumentu negativní nominální úrokové míry (Bech a Malkhozov, 2016). Všechny zmíněné banky již běžně zveřejňují svoji budoucí plánovanou monetární politiku a provádějí tak forward guidance (Svensson, 2014). Přes intenzivní využívání nástrojů nekonvenční monetární politiky zůstávají sazby centrálních bank rekordně nízké. ...
... Since the findings of Taylor (2000) and others were explored, it has been observed that a DSGE model, based on a system of structural equations has been tested by many researchers in almost every part of the world, and mixed results for these have been presented. For reference, these studies include the works of Adolfson et al. (2007) Ahmed (2008), Negro and Schorfheide (2013), Jawaid et al. (2011), Mahmood and Shahab (2012), Smets and Wouters (2007), Svensson (2010) and Mahmood (2010). These models have been estimated with the Bayesian techniques, using some of the key macroeconomic variables that are referred to commonly. ...
... Whilst not always underscored by the literature, an inflation below expected is also a source of financial and social losses for the citizens. It induces, for example, a payment of a higher (real) spread for financing public debt than necessary, a greater gap between income and potential income and an unemployment rate higher than the natural one (Adolph, 2013;Svensson, 2015). In this sense, Svensson (2015) presented an interesting study about inflation below a (credible) target and its effects on the Swedish economy. ...