us level. a good indicator of whether conditions are in place for stronger productivity growth in the future is the existence of a sufficiently high rate of economic transformation, for instance in the form of increased investment and a rapidly growing capital stock. there are few signs of this in the swedish economy, at least if one compares the 1990s with the 1980s. neither do other countries in europe yet show any widespread signs of what is called the new economy. one reason may be that europe is still in an earlier cyclical phase than the united states, so that investment in new directions has not yet taken off. given this optimistic interpretation, it should be just a matter of time before the positive effects also materialise in europe. a more pessimistic reading could be that many european economies are instead less flexible and more beset by rigidities, not least in the labour market, so that they have more difficulty in implementing and subsequently benefiting from the new technology. it might be argued that the high stock - market levels in some countries do represent an expectation of higher productivity growth. stock - market assessments of individual companies are expressed in share quotations ; the sum of these assessments and prices gives us an indication of what is expected of the stock market as a whole and this can be presumed to mirror how the total economy is expected to develop. and if current share prices are to be regarded as reasonable, there will clearly have to be an appreciable increase in future profits. this can then be interpreted as expectations of an overall increase in productivity and thus of a higher potential output. an alternative interpretation could be that the stock market is at least partially over - valued. a third possibility is, of course, that the development of share prices is explained by a combination of these two factors. all in all, it seems that one cannot yet be sure that economic relationships in sweden have changed to such an extent that a higher speed can be maintained continuously without risking an acceleration of inflation. while there are signs of effects on demand that might be explained in the same way as in the us economy, the supply - side effects via higher productivity growth are not yet as clear or as universal. it is conceivable that such effects on supply will materialise and the riksbank must be alert to that possibility. but we cannot count on such hopes in advance, particularly as they have not yet left any mark on leading indicators, for instance in the form of rapidly rising investment. what is the level of unutilis

##ctuated between 4. 5 % and 6 %, which are more normal levels. this succeeded in preventing - let me repeat, in preventing - an increase in inflation without causing the economy to enter a recession. on the contrary, the us economy will soon have achieved the longest upward phase in the post - war era ; the earlier record is due to be broken next month. while monetary policy has not, of course, been solely responsible for this, the achievement does demonstrate that a judicious interest rate increase can definitely contribute to a good economic performance, provided the sustainability of growth is taken into account. neither should it be forgotten that in the past two years the riksbank lowered the repo rate from 4. 40 % to 2. 90 % in connection with signs that economic activity would be checked by the asian crisis, the suspension of russian payments and problems connected with the american hedge fund long - term capital management. these obstacles are now out of the way. conclusion on thursday next week the executive board of the riksbank will be having this year ’ s first monetary policy meeting. in the light of how we jointly consider that the economy will develop in the coming years, the six members of the board will decide whether the repo rate is to be increased or held unchanged at 3. 25 % for somewhat longer. today i have pointed to some of the factors i believe will be discussed at the board meeting. it will be a matter, as always, of basing the monetary policy decision on a comprehensive picture of the various indicators of economic activity and inflationary pressure that the riksbank follows continuously. with the new executive board, it is also a matter of combining six individuals ’ personal perceptions of this picture and of policy ’ s formulation into a joint picture and a joint interest rate decision. there is no reason for me to anticipate matters. the result of our deliberations and joint assessment will be present on friday next week.