28 juni 2006

Riksbanken - Srejber - Should monetary policy subdue inflated high debts and asset prices in an inflation-targeting regime?

Today I intend to discuss how central banks should react to debts and asset prices that increase at a rate which is not sustainable in the long term. When the Riksbank decided at the beginning of the year to raise its policy rate, saying that one of the reasons was the rapid rate of increase in household borrowing and house prices, this was perceived by some people as meaning that we had introduced a new objective for monetary policy. However, this is not the case.
Sveriges Riksbank/Riksbanken - Srejber - Should monetary policy subdue inflated high debts and asset prices in an inflation-targeting regime?