who closely scrutinise the statistics to form an opinion of the economic situation and the driving forces behind developments. but my long experience in this field has taught me that it is important not to have blind faith in the accuracy of the measures we use to assess the economic situation. as economic statistics are very uncertain, it is important not to read too much into individual figures and to keep a cool head when sentiment fluctuates after an unexpectedly high or low figure. this slightly conservative approach to forecasting has been, and is, my guiding star as an economic forecaster. gradual adjustments to the forecast reduce the risk of taking a wrong turn and being forced to repeatedly revise the forecasts. as monetary policy is governed by forecasts, this can lead to fluctuations in the interest - rate policy. this in turn creates uncertainty for participants in the economy when they make their own decisions. i consider that the forecasts we have made in recent years are a good illustration of the gradual changes in the forecasts that i have mentioned. but of course one should always be prepared to make larger adjustments if the circumstances so require. autumn 2008 is a good example of this. i have on many occasions, at monetary policy meetings and in speeches, put forward the view that policy rate adjustments should normally be made gradually as a result of the uncertainty connected to forecasts and economic statistics. the well - known economists orphanides and williams say in an essay that this uncertainty indicates that one should not allow monetary policy to be influenced by contradictory information and statistics that are constantly revised. 10 instead, one should normally allow monetary policy to change gradually. this limits the impact of contradictory information and statistics that are often revised. former federal reserve chairman, alan greenspan, said “ uncertainty is not just an important feature of the monetary landscape ; it is the defining characteristic of that landscape. ” i can only agree with him. orphanides, athanasios and john c. williams, “ robust monetary policy rules with unknown natural rates ”, brooking papers on economic activity ( 2002 ), pp. 63 – 118. bis central bankers ’ speeches

imposed simultaneously in several euro area countries would have a negative effect on the surrounding world through lower trade and demand. this would have effects on the swedish export industry, which is dependent on trade with the euro area. good competitiveness – lower public debt at the same time, deleveraging at present involves a difficult balancing act, as extensive savings measures risk strangling consumption and leading to a downward trend, with a fall in growth. it is a major challenge to find an appropriate balance between reducing expenditure and raising taxes to alleviate the effects on growth. structural reforms of the product and labour markets are also necessary to improve competitiveness and ultimately growth potential. this is easier said than done, however, as such measures may be painful in the short term and politically difficult to implement. but countries that can create the right conditions for better competitiveness can hopefully also reduce the pressure on public “ debt and deleveraging : uneven progress on the path to growth ”, mckinsey global institute ( january 2012 ). imf fiscal monitor, debt database fall 2011. “ debt and deleveraging : uneven progress on the path to growth ”, mckinsey global institute ( january 2012 ). imf fiscal monitor ( april 2012 ), “ balancing fiscal policy risks ”. bis central bankers ’ speeches finances. if one studies figure 2, there appears to be a connection between good competitiveness and a lower public debt ratio. figure 2 relationship between competitiveness and public debt ratio sweden denmark finland germany norway spain usa ireland italy portugal greece note. the public debt ratio is shown as a percentage of gdp on the horizontal axis. sources : world economic forum 2011 and imf fiscal monitor april 2012. the vertical axis measures the respective country ’ s competitiveness as defined by the world economic forum 2011, 6 while the horizontal axis measures the current level of public debt as a share of gdp. a higher value on the vertical axis means that a country has a better competitiveness. there may, of course, be many factors that affect the public debt ratio, but according to the figure it would appear that countries with good competitiveness also tend to have a lower public debt ratio. at the same time as it will take a while for the euro area countries to bring down their debt levels, it is important to point out that these countries are not alone in facing budget consolidation. the united states is also facing the challenge of improving its public finances. usa – fiscal policy challenges the us public debt amounted to 103 per cent of gdp