kristina persson : why is inflation so low? the example of the retail sector speech by ms kristina persson, deputy governor of sveriges riksbank, at the nordic retail college, norrtalje, 24 may 2005. * * * introduction strong forces are affecting the developments in the world economy today. globalisation and stiffer international competition are having an impact on individual countries'economies in many different ways. in sweden, this has contributed, among other things, to a very low inflation rate in recent years. the subdued developments in the prices of imported goods partly reflect the integration of countries such as china and india into the world economy. likewise, the surprisingly robust productivity growth can probably to some extent be attributed to the increased international competition. also contributing to the low inflation is the increasing establishment of low - price chains in the swedish non - durables sector in recent years. this increases competition and helps squeeze swedish food prices. i intend to begin by briefly discussing global structural change in general and thereafter to concentrate primarily on the changes that we are seeing in the swedish non - durables sector at the moment. finally, i also intend to touch upon the current economic situation. globalisation raises the demands on flexibility globalisation means ” the growing mutual dependence between countries around the world through the increasing volumes and amounts of cross - border transactions in goods, services and capital flows ”. 1 this process has intensified in recent years, partly reflected in a sharp pick - up in world trade, an even faster increase in direct investment and a very steep rise in global equity and currency trade. globalisation has given rise to rapid structural change, resulting in jobs being shed in certain sectors or being relocated to countries with lower production costs. sweden has, for a long time, experienced fast structural change, which contributed to the strong economic performance in the 1990s. less than 100 years ago, around half of sweden ’ s employed worked in agriculture and forestry ; today, that figure is only 2 per cent. over the same period, the proportion of the employed in the services sector has risen from roughly 20 per cent to 75 per cent, at the same time as the proportion in manufacturing increased at first from about 30 per cent to just over 40 per cent and then fell to 20 per cent. among other things, we saw during the 1960s and 1970s that large parts of swedish manufacturing, in the shape of the textile and shipbuilding industries, were outsourced from sweden. one consequence of structural change is that when old sectors

lars nyberg : are hedge funds dangerous? speech by mr lars nyberg, deputy governor of the sveriges riksbank, at a meeting at nordea and the cfa society of sweden, stockholm, 24 november 2006. * * * i shall begin by thanking you for the invitation to come here to nordea and the cfa society of sweden to develop some thoughts on the usefulness and risks with hedge funds. after several years of strong growth, hedge funds are a hot topic among market agents and authorities. although hedge funds ’ percentage of the total capital managed is small, around five per cent, they account for a large part of the liquidity on certain markets. many people express concern as to what effects hedge funds might have on financial stability and after the much - publicised collapse of the us hedge fund amaranth in the autumn, the debate on regulation has gained new impetus. as you may perhaps know, amaranth primarily traded various gas and energy derivatives. after summer 2005, amaranth held gigantic positions in the gas market – they believed in a price increase. between august and october 2005 the price of natural gas rose by 50 per cent, partly as a result of the severe hurricanes. the fund earned substantial amounts of money and the fund managers were also expecting this autumn to see high energy prices during the winter. they bought futures for november and march and sold ( sold short ) contracts for october and april. however, this year did not develop as expected. during the period from august to mid - september the price of natural gas fell by 40 per cent and in a couple of weeks amaranth lost usd 6 billion, which corresponded to two thirds of its capital. despite the size of the amount, the market effects were largely non - existent and there was never any concern in terms of financial stability. the private sector also managed to settle its positions without any intervention from the responsible authorities. does this mean that the concern over hedge funds is exaggerated? or is increased regulation necessary? before i discuss these questions, however, i would like to take a brief look back at the development of hedge funds in recent years. a look back hedge funds are a relatively new phenomenon in the swedish market. however, the first hedge fund was established in the united states 60 years ago. at the end of the 1940s, us journalist alfred winslow jones bought shares he considered to be under - valued and sold short shares he considered over - valued. his idea was that the price of under - valued