; it may even be required for a good and sustained development of employment and growth, as is illustrated by how the federal reserve has acted in the united states. this shows what a forward - looking monetary policy can do for sustained growth. the formulation of monetary policy in the united states, with timely restrictive measures, has contributed to the american economy now being in its longest post - war period of growth. during rapid economic expansion, problems with bottlenecks may occur temporarily because new production facilities are not always available just when they are needed to cope with increased demand. experience in the 1990s suggests, however, that firms have become more flexible, both in the utilisation of existing capital stocks and in the procurement of new technology, machinery and plant when demand rises. this suggests that, if anything, it is not the level of unutilised capital resources that is critical at present. instead, an analysis of resource utilisation should probably focus on the labour market. another reason for this is that in a price analysis at macro level, the weightiest item in costs is wages ; total wage costs are equivalent to over two - thirds of gdp. the level of unemployment has been reduced but remains high, particularly compared with the post - war period up to the early 1990s. seen from that angle, some might say that the swedish economy has plenty of unutilised resources. experience from other european countries has taught us, however, that after a severe shock, as happened in the early 1990s, unemployment tends to stick at a high level, at least for a while. estimates of the equilibrium level of unemployment in sweden suggest that it moved up in the early 1990s and in terms of registered unemployment is somewhere in the interval 4. 5 to 7. 5 %. considering that the rate of registered unemployment is currently inside this interval, the estimates would suggest that the swedish economy is now close to full capacity utilisation. estimates of equilibrium unemployment are uncertain, however, and it is important that the riksbank ’ s monetary policy does not unnecessarily hamper decreased unemployment. all the other information about labour market tendencies has to be considered as well. a deeper analysis is needed as a foundation for any conclusions that the economy is approaching full capacity utilisation. when an economy is moving closer to its capacity ceiling, certain statistical phenomena can be expected to occur more clearly and frequently. the same applies to anecdotal information in such a situation. this can take the form of,

the fund has a very important role to play in analyzing spillovers and interdependencies. and it is the only institution that can perform this role : it is global in scope, and it regularly convenes the national authorities from the world's most important economies. so how can we best accomplish the goal of strengthening fund surveillance? i would say two things. first, the imf needs to update the rules for conducting surveillance. we need a clear statement that surveillance will focus on exchange rate, monetary, fiscal, and financial policies, and on whether or not a country's policy choices are coherent. this is not just because these policies can affect other members of the global economy, but also because these global effects can, in turn, have repercussions for a country's own economic prospects. second, the fund should adopt the idea of setting out an annual work program for surveillance. each year, the members, along with the managing director and staff, would update and specify – in concrete and transparent terms – the objectives and priorities of surveillance for that year. i mention these issues today because we have a window of opportunity to move forward on imf reform. there is today, at least in some quarters, a willingness to strengthen this institution, to make it more relevant. as the world's economies become increasingly globalized, i would argue that now, more than ever, a strengthened imf is in every country's interest. the risk of a disorderly resolution of global imbalances may be relatively small, but it remains an important risk for all economies. strengthening the imf is one way of reducing this risk.