In this paper we discuss the recent experience of conducting monetary policy with a collegial board according to the Riksbank act. Interest rate decisions are normally taken with the aim to bring inflation in line with the 2 per cent inflation target one to two years ahead. When there are...

In this paper key points in the development of the present Swedish inflation-targeting strategy are analysed. Since the implementation of the inflation target strategy began in 1993, three different phases are distinguished: the establishment of the inflation target, the communication of...

Previous studies of the sources of real exchange rate fluctuations have concluded that real demand shocks account for the bulk of the movements in real exchange rates. In this paper, bilateral real exchange rates between the US, the UK, Germany and Japan are investigated using a statistical...

Supervisors sometimes have to manage both the micro- and macro- prudential dimensions of bank stability. These may either conflict or complement each other. We analyze prudential supervision by the Central Bank of Russia (CBR). We find evidence of micro-prudential concerns, measured as the...

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In this paper, we offer one possible way to estimate a key feature of the Bank of Canada’s main macroeconomic model, the Quarterly Projection Model or QPM. The key feature which is the focus of this study is the so-called "short-run equilibrium values" or SREQs which link the dynamic portion...

This paper addresses two important questions that have, so far, been studied separately in the literature. First, the paper aims at explaining the high volatility of long-term interest rates observed in the data, which is hard to replicate using standard macro models. Building a small-scale...

The empirical failure of uncovered interest parity (UIP) is one of the best-established facts of international economics. The exchange rates of countries with high nominal interest rates tend to appreciate rather than depreciate as expected from UIP. However, virtually every published test of...

A complete procedure for calculating the joint predictive distribution of future observations based on the cointegrated vector autoregression is presented. The large degree of uncertainty in the choise of the cointegration vectors is incorporated into the analysis through a prior distribution on...

In this paper an expectations-augmented Phillips curve relation in an open economy is derived and estimated. As in Rotemberg´s (1982) model firms are assumed to face quadratic price adjustment costs. In addition, second-order costs of changing prices are not included. Consequently the derived...