##eriges riksbank ( 2014 ). it has been claimed in the debate that the calculated effect is not statistically significant from a classical statistical perspective. however, the calculations were made using a so - called bayesian method and it is therefore misleading to use a classical approach to test the hypothesis that the effect is positive. moreover, it is important to note that here we are talking about a systematic relationship. of course, one cannot rule out the possibility that under special circumstances the debt ratio or real debt might decline when the policy rate is cut. but it appears very improbable that this is the case on average. see, for instance, sveriges riksbank ( 2014 ) and alsterlind et al ( 2013 ). bis central bankers ’ speeches indebtedness. this type of communication could in itself affect households ’ behaviour on top of the effects of the actual interest - rate policy. greater openness for a change in monetary policy strategy abroad while in sweden one seems to assume that the answers are given, the attitude in the international debate is less “ dead certain ”, at least this is my experience from meetings and conferences and from the discussions pursued on economic blogs and in academic research. although no clear majority has emerged in favour of any of smets ’ views, my impression is nevertheless that many economists who study monetary policy issues have increasingly moved toward the view that a monetary policy that leans against the wind may be justified. smets himself, for instance, reaches this conclusion and economists at policyoriented institutions such as the imf, the oecd and the bank for international settlements ( bis ) have also expressed support for this point of view. 24 the argument in favour of monetary policy possibly needing to counteract financial imbalances has also made an impact on other central banks. unsurprisingly, the most obvious examples of this can be found in countries struggling with roughly the same problems with indebtedness and the housing market that we have in sweden. the exact formulations differ somewhat of course, but there are clear similarities. for instance, norges bank ( 2012 ) writes : “ at the same time, interest rate setting should be robust and counter the buildup of financial imbalances in the economy. ” the reserve bank of new zealand ( 2012 ) has the following wording : “ in addition, the pta ’ s [ policy targets agreement ] stronger focus on financial stability makes it clearer that it may be appropriate to use monetary

probably imagine how ancient retailers were quite happy with this invention. yet, without an assigned and trusted issuer, they still required the coins to have intrinsic value, i. e., to be made of precious metals. there were other problems with coins. firstly, they were often debased by mixing the gold or silver with less valuable metals. also ‘ clipping ’, that is, shaving off part of the material, was fairly widespread. this led to a phenomenon that many years later became known as gresham ’ s law. it says that in commerce ‘ bad coins ’ drive out ‘ good coins ’ as the latter are kept for saving purposes. mistrust in the coin system, or even its entire breakdown, was often the unhappy consequence. another issue was the plethora of mints that continued to grow in number as technology spread. fast forward, and at the mid - medieval period it had become fashionable for every european kingdom and principality to issue its own coins. with production costs lower than the coins ’ value, this was a useful source of income to finance the frequent wars at the time. but with multiple coins drifting around and uncertainty about their true value, it was essentially a mess. however, where there is chaos innovative minds see opportunities. during the 12th century, in the northern part of italy, a new type of institution emerged. these specialised in exchanging foreign coins for local ones, not unlike present day foreign exchange dealers. this reduced the problem with the many coins causing much confusion. even more advanced, some of the new institutions started to swap coins for bills of exchange that could be used in local trade. 3 the medieval coin - exchange providers brought banking to europe, it is often said. initially, they only handled deposits, as charging interest was viewed as usury by the powerful church. however, with italy the epicentre of european trade, you could still run a proper business facilitating transactions only. later, the house of medici and its peers took banking as well as bookkeeping to the next level. around the same time, the famous knights templar were also chipping in with innovations in payments and banking. they provided services for long - distance payments, one of them a system akin to international cheques. europeans involved in the crusades were faced with a long and dangerous journey to the holy land, where carrying valuables was risky. instead, the knight templars offered their clients to deposit their belongings at home against a letter. this - the