could also argue that the existence of quite a few structural obstacles in europe makes an acceleration of productivity growth less likely in the immediate future. a handful of countries - including the netherlands, ireland, the uk and, more recently, sweden and finland - have achieved strong economic growth and in some cases also low inflation. but with the exception of ireland, these countries have not yet enjoyed the same strong productivity growth as the us. nevertheless, the possibility of a productivity breakthrough also in europe cannot be ruled out. it will probably depend on how well europe succeeds in reforming microeconomic policy. higher - or accelerating - productivity growth does indeed pose new challenges for monetary policy. it could set in motion a complex of effects on aggregate supply and demand, on inflation, equity prices and interest rates. just to give a few examples, let me briefly mention the following effects : first, a positive productivity shock raises the economy ’ s potential growth rate. it also affects aggregate demand through new, profitable investment opportunities, higher equity prices and expectations among households of higher permanent income. one question for policymakers is whether the demand effects are so powerful that they have the potential to outpace the growth of aggregate supply in the short and medium perspective. second, there could be temporary disinflation effects at work if the increase in productivity is unexpected initially. if wages are slow to adjust, higher productivity growth lowers unit labour costs and thereby reduces price inflation. here again there are important questions for policymakers. should this effect be allowed to result in a temporary reduction of price inflation or unemployment? third, an increase in the trend rate of productivity growth could also result in a higher equilibrium real interest rate, when the output gap is closed, in order to balance saving and investment. fiscal policy and the development of public financial balances could at least partly offset this effect, as could the economy ’ s degree of openness. all this implies that monetary policymakers, also in europe, could face quite a few challenges. one of them is to identify structural changes and distinguish these from cyclical variations. another challenge is to detect the magnitude of the effects. furthermore, looking ahead in monetary policy is hard when the economy is going through major changes that make it difficult to forecast the future path of the economy and inflation. it is quite clear that this demands a great deal of forecasters as well as of those who construct macro models. the forecasts concern inflation one to two years ahead, which calls, for instance, for reasonable precision in the

and 11 see petition to the swedish riksdag 2018 / 19 : rb3 the state ’ s role on the payment market, https : / / www. riks - bank. se / globalassets / media / betalningar / framstallan - till - riksdagen / petition - to - the - swedish - riksdag - the - statesrole - on - the - payment - market - summary. pdf 14 trusted legal foundations. these are areas where the public sector has a lot to offer, but ultimately, it is the private sector that has to deliver the services towards the end - users. nevertheless, the public sector is now setting the course, and hopefully, in a couple of years, a cross - border payment will be almost as frictionless as a domestic payment. that should at least be the aim, i think. building payment systems for our grandchildren allow me to offer some concluding remarks. history has taught us many things. trust and uniformity, technology and innovation, network and scale effects, and the division of responsibilities of the public and private sector are fundamental drivers of the payments market. the speed of innovation is faster than ever, pushing the riksbank to adapt and respond to the evolving world around us. this is why we are now updating and modernising our services. we will soon launch rix - inst for instant payments. in addition to that, we have made a decision to take preparatory steps to connect the swedish krona to the eurosystem ’ s t2 and t2s platform. we are heavily involved in international work to enhance cross - border payments, and we are carrying out investigative work on a potential e - krona. in my view, all of these decisions follow a long riksbank tradition of providing a forward - looking, cost - effective and secure payment infrastructure. 15