’ s position as one of a handful of countries in europe that has not succeeded in getting a functioning macroprudential policy into place. with such a large financial system and the obvious major vulnerabilities present in the swedish economy, our focus should be on urgently adopting measures. valuable evaluation of monetary policy we thus have an unusual time behind us that has required unusual measures over the past year. under such circumstances, it is natural to wonder, for example, how well the inflation target is functioning and which areas monetary policy should be responsible for. it therefore seems appropriate that the riksdag committee on finance has just published its latest assessment of monetary policy. 6 first and foremost, i would like to say that it has been a privilege to have my work reviewed and assessed by people with such impressive academic and practical credentials in the area of monetary policy as those possessed by messrs. goodfriend and king. assessments are a key ingredient in every kind of work to improve operations and this assessment contains many reasonable opinions and suggestions for discussion and further work. we will do this over the spring, before submitting our consultation response in april. today, i will just express my own initial reactions to a few of the elements in the assessment that come closest to the theme of today ’ s address. first and foremost, i cannot, of course, avoid noting that goodfriend and king also consider that swedish monetary policy since the introduction of inflation targeting has been an overall success. neither is there any doubt that they support an inflation target as the starting point for monetary policy. however, they would like to switch target variable to the cpif, that is the cpi with a fixed mortgage rate. it would not be difficult for us to make such a change, as we already focus most of our analysis and communication on the cpif. at the same time, i think that there may be reason to evaluate several possible measures, for example the internationally - comparable measure hicp, as my colleague on the executive board per jansson has previously discussed in a speech. 7 i appreciate how much goodfriend and king have endeavoured to base their assessment on the information and experience available at the time of each individual decision, rather than proceeding on the basis of everything we know today about how developments turned out. as they note, we have been through a difficult period with major challenges and difficult decisions. one consequence of this is that it has been particularly difficult to make a good forecast of the rep

klaas knot : relaunching growth in europe together speech by mr klaas knot, president of the netherlands bank, at the eurofi financial forum, berlin, 10 september 2020. * * * ladies and gentleman, more than six months after the outbreak of the covid - 19 pandemic, it is clear that the virus has pushed the global economy into deep recession. the european economy has not been spared. what i am particularly concerned about is that the ability to recover from this blow is far from equal across euro area member states. this crisis has thereby reemphasized the challenges to our economic and monetary union. challenges that are posed by a creeping divergence in productivity growth, competitiveness and per capita income between member states. although many of you may share my concern, the urgency is not felt by everyone outside this room. therefore, today i would like to argue why i think growth divergence in the euro area threatens to undermine the benefits of european cooperation. and i will outline how i think we can successfully overcome this challenge. challenges of the single currency indeed, the economic benefits of european cooperation are still convincing. take the european single market. a wide body of research shows it has clear benefits for each and every member state, with small, open economies the dutch one benefiting most. also, there are still strong economic arguments in favor of our common currency. a single market like the european market, where there is intensive trade between countries, benefits from the absence of exchange rates. the success of the single market is therefore built on the bedrock of the euro. but we have seen that a single currency also brings disadvantages. certainly for a group of countries that differ quite a bit from each other economically. until now the euro has not lived up to its promise of bringing sustainable economic convergence. in fact, we have seen the opposite. as devaluations are no longer possible, countries with lagging productivity growth can only restore competitiveness through wage moderation. but even in competitive countries like germany and the netherlands, wage growth is already muted. structurally undercutting german and dutch wage growth is therefore easier said than done. you could say that the euro always gives a little boost to the more productive, more competitive economies in the north. to southern economies where productivity growth is generally lower, the euro is a relative burden. that is why the more productive and the less productive economies have a tendency to diverge. if this imbalance persists for