upswing in the usa has contributed to strengthening expectations of faster long - term growth in sweden as well. it is therefore important to understand whether an american level of growth is sustainable in the long - term and whether anything similar can take place in sweden. an important basis for the favourable development in the usa is probably the focus on budget consolidation and price stability that has guided economic policy there for a long time. we have had a similar development in these areas in sweden, although the process started later here. at the same time, there are similarities with regard to the strong penetration of information technology in the economy, although we are also later in this development. as in the usa, high asset prices and strong optimism have stimulated demand and increased the level of indebtedness in the swedish economy. although it is not yet possible to write off the risk of financial imbalances building up the usa imbalances that can have negative effects for the american economy - it now seems as if the american economy may be on its way to a soft landing. however, there still remain the global financial imbalances that have been built up over many years with very high saving in japan and very low saving and high indebtedness in the usa. we have still not seen how these imbalances are to be resolved and the consequences this will have for the world economy. although there are some indications that the swedish economy is experiencing a similar development as the american, the structural differences cannot be disregarded, which probably create greater inertia in the swedish economy than in the american. one such area is the labour market. considerable barriers to competition remain in the swedish economy as well. another difference is that the cyclical upswing we are now experiencing is taking place at the same time as an increase in growth and resource use in the rest of the world. we cannot therefore benefit in the same way as the usa from there being unused resources in the rest of the world. conclusions the riksbank makes the assessment now that gdp growth will be over 4 % this year and average over 3 % during the next two years. this rise is taking place after a number of years with considerable growth. despite this, inflation is low and is expected to remain so for the whole forecast period. we cannot with certainty determine the processes concealed behind the weak increase in prices. i drew the conclusion during the spring that we had probably underestimated the output gap, ie the amount of unused resources available in the economy initially and

downturn with repercussions for the entire global economy. steering interest rates were cut all around the world, including in sweden. nevertheless, inflation continued to rise. a cold winter in europe, problems with the swedish apple harvest and poor fishing catches led to rising prices on fruit, vegetables and fish during the autumn. it is obviously easy to get caught up with details and fail to see the underlying changes. however, we could see even more clearly that the rise in inflation was not merely due to transitory factors, but entailed a broad rise primarily in domestic prices. this could be connected with the fact that secondary effects from the higher energy and food prices had made a greater impact in the consumer channel. another important factor was that wage growth, despite the weaker development in demand, became even more problematic. within many industries, for instance, construction, retail trade, banking and insurance, as well as the public sector, wages rose considerably during 2001. at the end of 2001 / beginning of 2002, there were signals from confidence indicators that economic activity might have reached its lowest level in the usa and also sweden and some optimism regarding the future began to spread. the effects of the terrorist attacks appear to have been limited, although some sectors were hit very hard. to sum up, we can conclude with the aid of this slide ( oh 1 the riksbank ’ s forecasts for gdp 1999 - 2003 ) that the year 2001 entailed constant downward adjustments in the growth forecasts. at the same time, we can conclude the opposite with regard to the inflation forecasts ( oh 2 inflation forecasts 1998 - 2002 ), which we have been forced to revise upwards again and again. if we are right that a recovery is now beginning both in sweden and abroad, we can conclude that the economic downturn was one of the mildest of the post - war period, partly as a result of resolute stabilisation policy. however, the slowdown in sweden and the rest of the world during 2001 was unexpectedly severe in relation to the forecasts made in 2000. the fact that forecasters miss turning points in the economic cycle is not unique to this particular downturn, but quite a common phenomenon. i will return to the current situation, but first a look back in time. historical patterns are repeated is it possible to learn lessons from history? both yes and no. if one studies economic slowdowns over the past three decades, one can see that they differ considerably both