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Title: The Swedish Experience of an Inflation Target

Author(s): Lars E.O. Svensson

Publication Date: January 1995

Keyword(s): Floating Exchange Rates and Monetary Policy

Programme Area(s): International Macroeconomics

Abstract: 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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Bibliographic Reference

Svensson, L. 1995. 'The Swedish Experience of an Inflation Target'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=1103