PB16–4, April 2016; Saroj Bhattarai and Christopher Neely, “ A Survey of the Empirical Literature on U.S. Unconventional Monetary Policy,” Federal Reserve Bank of St. Louis Working Paper, no. 2016–021A, October 2016; and John C. Williams, “Monetary Policy at the Zero Lower Bound: Putting Theory into Practice,” Brookings Institution Hutchins Center Working Papers, January 2014. 22 Studies show a lower median effect for Japan. Gagnon hypothesizes this may be associated with Japan’s  much larger government bond market relative to GDP than the other countries studied, perhaps suggesting that asset purchase effects operate in proportion to the size of the targeted bond market rather than the size of the economy. 23 See Ben S. Bernanke, “Monetary Policy in a New Era,” presented at the Peterson Institute for International  Economics conference, Rethinking Macroeconomic Policy, Washington, D.C., October 12, 2017. Bernanke argues, however, that deploying unconventional tools may not be sufficient in addressing a sharp downturn, and that changes in a central bank’s monetary policy framework may improve a central bank’s effectiveness in defeating the zero lower bound. 24 In addition, asset purchase programs may actively promote liquidity and improve market functioning during  periods of financial market stress, as was the case with the Fed’s first LSAP program, initiated at the height of 11 / 13  BIS central bankers' speeches  the crisis. In turbulent market conditions, the central bank’s willingness to purchase particular classes of assets can boost confidence and lower liquidity premiums that investors would require to hold otherwise illiquid securities.

Immediately after each meeting, the Bank issues a press release and holds a press conference. The key interest rate is set on the basis of an overall assessment of the inflation outlook two years ahead. Our inflation projections and our views on the balance of risks associated with these projections provide a summary of these assessments. Norges Bank’s inflation projection is our assessment of the most probable outcome of the rise in CPI two years ahead. In setting interest rates we also place emphasis on the probability distribution – or the balance of risks – surrounding the projection. Therefore, we also publish our judgement of the risk associated with our own projections. The phasing in of petroleum revenues has to be counteracted by a tighter monetary policy than would otherwise be the case. This may be accomplished through an adjustment of the interest rate, an appreciation of the krone or both. Small countries have experienced fairly wide exchange rate fluctuations. The Swedish krona has depreciated by more than 10 per cent since summer 2000. The Australian dollar has weakened by  BIS Review 18/2002  1  over 30 per cent since spring 1997. The UK, Canada and New Zealand have also experienced wide exchange rate fluctuations. The Norwegian krone, on the other hand, has been relatively stable. A monetary policy that is oriented towards low and stable inflation will contribute to stabilising aggregate demand and output. As a result, the central government budget will not normally have to be used actively to stabilise the economy.