has also managed better than those in many other countries. to some extent this is probably due to lessons learned from our own earlier bank crisis. for example, the banks have avoided so - called structural products with elements of high - risk us mortgages, which were one of the causes of the crisis in the first place. the riksbank ’ s assessment and decision in september at our most recent monetary policy meeting in september we could note that the situation in the world economy had continued to improve, although the strength of the recovery was still uncertain. the public finance problems in certain eurozone countries were still causing some concern and there was uncertainty over the consequences that stricter fiscal policy might have for growth in these countries. but compared with the situation in the spring and early summer, the unease on the financial markets had toned down, partly as a result of the stress testing of the banks by the eu during the summer. growth prospects in the eurozone were in principle thought to be the same as at our meeting in june. however, we could note that the risk of slower growth in the united states had increased and we revised down the forecasts for us growth this year and next year. nevertheless, we envisaged, as before, that the international economic climate would gradually improve. we could also note at the meeting that the recovery in the swedish economy had been more rapid than expected, and our assessment was that the swedish economy would grow more quickly than, for instance, those in the eurozone and the united states. one reason for this, as i have just discussed, is that unlike many other countries, we do not need to tighten policy to correct large budget deficits and debt ratios. world trade had picked up again and this had shown an impact on our exports. moreover, the strong optimism among both households and companies in sweden indicated that domestic demand could be maintained over the coming years. our forecast in september was for gdp growth in sweden of around 4 per cent this year, to be followed by a slower growth rate. this would put gdp in mid - 2011 back at the same level as at the end of 2007, that is, before it began to fall. in september we could once again note that the recovery in the labour market had been surprisingly strong. the new forecast made entailed employment being at the same level as prior to the crisis as early as next year. our assessment of unemployment was that it would fall relatively quickly over the coming quarters and then decrease at a slower rate

##l ( 2009 ) : monetary policy and the housing bubble, finance and economics discussion series 2009 - 49, federal reserve board. bis central bankers ’ speeches figure 1 policy rates minus actual inflation ( cpi change ), 1998 –, per cent sources : central banks and statistics agencies in the respective countries countries such as ireland and spain have also seen a bubble - like development of their housing markets : first a situation with gradually rising prices over a long period of time which was then followed by a rapid fall. would it have been possible to avoid this if the ecb had conducted a tighter monetary policy and what would this tighter policy have cost in terms of unemployment and possible deflation in countries such as germany, where the economy was developing quite differently? 6 i have no clear answers to these questions. but even though it is possible that an expansionary monetary policy contributed to the development of housing - price bubbles in some countries, it is still the case that other factors were the prime causes of the global financial crisis. the federal reserve began raising the interest rate already in 2004. over the course of two years it increased by more than four percentage points, at the same time as loans continued to grow. in the united states, deficiencies in the regulation of the mortgage market and a housing policy that promoted homeownership among low - income earners were more prominent contributing factors. a study based on swedish data has indicated that low real interest rates in combination with increasing incomes have been important factors behind the increases in prices for housing in sweden. 7 as both real interest rates and incomes are affected by monetary policy it should be possible to say that movements in housing prices have been indirectly affected by monetary policy. however, the same study points out that if monetary policy had been used a study that shows that asset prices are dampened to only a relatively limited extent by a policy rate increase while the negative effect on gdp is relatively substantial is assenmacher - wesche and gerlach ( 2010 ) : credit and bubbles, economic policy, july 2010. claussen, jonsson and lagerwall ( 2011 ) : a macroeconomic analysis of housing prices in sweden, the riksbank ’ s commission of inquiry into risks on the swedish housing market. bis central bankers ’ speeches to stem housing - price increases, then this would have been extremely costly in terms of lower growth and lower employment. 8 so, although we cannot entirely discount the role of monetary policy as a tool for averting financial crises, it is not