monetary policy that has been conducted. it is a little like taking medicine in connection with an illness and when cured drawing the conclusion that it was unnecessary to take the medicine. on this point i feel that the events of spring 2015 are a good illustration. the ecb had announced in january that it intended to buy securities over slightly more than a year to come for the equivalent of sek 10, 000 billion ( around 2. 5 times the size of swedish gdp ). this is indeed a very substantial monetary policy intervention. within the course of just a few weeks the krona exchange rate appreciated significantly against the euro, from almost 9. 65 krona per euro to just over 9. 10. this was in itself a large appreciation of almost 6 per cent, but the real danger lay in the fact that it could have been much worse. during 2014 and up to spring 2015 the us dollar and the british pound sterling had appreciated by between 15 and 25 per cent against the euro. there was agreement on the market that differences in monetary policy were decisive for the different development paths of these currencies and the swedish krona against the euro. if the swedish krona had in this situation so to speak appreciated level with the dollar and sterling, the total appreciation would have been around 30 per cent. this would have meant a very serious deterioration in the competitiveness of the swedish export industry and would have entirely changed the playing field for the swedish economy ( see figure 8 ). under such circumstances there would certainly not have been any growth in the vicinity of 4 per cent in 2015. my own impression is that the risk the swedish economy was exposed to at this stage is severely underestimated by many commentators. they appear to assume that the strong performance in 2015 would have happened more or less regardless of monetary policy and the krona exchange rate. the fact that the riksbank in february reacted by introducing a negative repo rate and beginning to buy government bonds is not considered to have played any major role. although it is possible that the outcome would not have been quite as bad as i have outlined above, i think that it is extremely misguided to assume that monetary policy was more or less insignificant. there is also good reason for a reminder of a circumstance that tends to be forgotten. the current debate sometimes gives the impression that the swedish economy has for some time been in a situation of almost overheating. but the fact is that we fairly recently, according to most empirical estimates, once again attained

for the possibility that it could take longer than we previously assumed, without making monetary policy more expansionary.... but the aim of the policy would not change if we were to find ourselves in such a situation it would not mean that we were suddenly to start conducting a completely different policy and begin raising the repo rate, for instance. there would still be reasons to conduct a policy that is as expansionary as possible, to avoid taking longer than necessary to attain the target. however, one consequence would be that the riksbank's communication became very important. the damage in a situation where monetary policy can no longer be made more expansionary, despite inflation being expected to undershoot the target for quite a long time, will be much less if the general public can be convinced that the target has not been abandoned, that it is merely a question of taking longer than normal to attain it. clarifying this would be a difficult but hopefully not impossible task. here it is important to realise that inflation can be controlled by the central bank in the long run. inflation is ultimately, as is often put, a monetary phenomenon and determined by how expansionary monetary policy is on average ( see figure 12 ). digitalisation, globalisation and other structural changes can push down inflation during certain periods of time, and these periods can very well be quite long. however, the effects of structural changes on inflation do not last for ever. in the long run, it is monetary policy that determine the rate of inflation in the economy and “ rational ” long - term inflation expectations should therefore still be in line with the central bank's target for price stability. if the public makes this presumption, the negative consequences of taking longer to attain the inflation target will be much less serious. 11 concluding comments let me round off. my purpose here has been to do two things. firstly, i have tried to put the recent debate on monetary policy into perspective. i have discussed the criticism raised against our policy in general and against the negative repo rate in particular. as i hope i have made clear, there are some gaps in the criticism. i noted earlier that the main argument is often merely that monetary policy for various reasons is wrong. what i feel is often missing is a discussion of why the advantages of the inflation target should no longer apply and what the consequences would be if the riksbank abandoned it. it is no new phenomenon that the debate fails to answer important questions. in the mid