NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Swedish Experience of an Inflation Target

Lars E.O. Svensson

NBER Working Paper No. 4985
Issued in January 1995
NBER Program(s):   IFM   ME

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; considers 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 setup 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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Document Object Identifier (DOI): 10.3386/w4985

Published: Inflation Targets, Leonardo Leiderman and Lars E.O. Svensson, editors. London: CEPR, 1995. pp 69-89

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