all the considerations we have faced would be captured by this model. concluding remarks by way of conclusion, there are a number of issues on which we need to evolve our thinking. i believe that the contributions to this conference have indeed succeeded in capturing the most important and relevant ones. see, for example, fischer, s. ( 1996 ), “ why are central banks pursuing long - run price stability ”, in achieving price stability, symposium sponsored by the federal reserve bank of kansas city, jackson hole, wyoming. a recent reference that has brought the problem to the fore once again is faust, j. and d. w. henderson ( 2004 ), “ is inflation targeting bestpractice monetary policy? ”, federal reserve bank of st. louis review 86 ( 4 ), 117 - 143. one of the most central from my point of view concerns, as i have indicated, the balance between inflation stability and output stability - both in terms of the most appropriate way to accommodate it in the practical policy and the best way to communicate it. although there is hardly any doubt that “ we are all flexible inflation targeters now ”, how can we progress as regards concretising this flexibility in action and communication? another interesting question is whether inflation targeting is better suited than other regimes when it comes to anchoring long - term inflation expectations. i have always thought so myself, but it is of course an issue that requires empirical investigation. one might also ask whether inflation targeting, even if it should have succeeded in anchoring long - term inflation expectations, can become better than it is today at facilitating the formation of expectations in the near and medium term? this relates to an issue that is addressed in several of the contributions, namely how we should best communicate our expectations and plans regarding the future conduct of policy. recently, a number of central banks have begun to depart from the assumption of an unchanged policy rate in their forecasts, choosing instead to work with paths for future interest rate developments. what kind of interest rate paths should we use in that case - “ exogenous ” paths based on implied forward rates or “ endogenous ” paths that reflect the central bank ’ s own expectations and plans, and what are the advantages and disadvantages of both options? and could, for example, an excessive degree of openness and detail as regards the central bank ’ s own expectations risk increasing market volatility instead of facilitating economic agents ’ planning? these are just a handful of the issues that are

to warrant “ tough talk ”. whether it was a wise strategy to begin in this way with a one - sided focus on inflation is perhaps open to question. one could argue that it would have been better to choose a more balanced line from the outset. it might then have been possible to counteract some of the criticism levelled at the riksbank for supposedly “ focusing exclusively on inflation and completely disregarding employment ”. from the mid - 1990s and onwards, though, the riksbank tried in various ways to clarify that we were not focusing solely on stabilising inflation. i believe it is correct to say that the implementation of policy also began to become more flexible around that time. one of the examples of this is the fact that we did not utilise the scope for rate cuts that - according to a stricter interpretation - deregulation and other supply factors had created during the last few years of the 1990s. the clearest example of how we attempted to convey that our inflation targeting policy was flexible rather than strict was the clarification of monetary policy that the executive board published in 1999. in that, we explained that it may be appropriate in some situations - e. g. in the event of large shocks and deviations from target - to refrain from bringing inflation back to target too quickly in order to mitigate the adverse consequences for output and employment. 1 we expressed this in terms of there being reasons to occasionally depart from our simple policy rule - that the repo rate is normally raised if inflation one to two years ahead is forecast to be above 2 per cent, and vice versa if inflation is forecast to undershoot the target. explicit framework as basis the strategy that we in sweden have chosen for dealing with the “ flexibility problem ” could, in simplified terms, be described as that we, when we have found it necessary, have in various ways modified and adapted a framework - mainly represented by an explicit symmetric target, regular publication of detailed decision - support data including forecasts, and a simple policy rule for how the repo rate is normally adjusted against the background of the forecasts. this is probably the key reason why the flexibility on our part can chiefly be said to be reflected in “ exceptions ” to the policy rule, rather than it being explicitly described in terms of a continual procedure of balancing concerns for output and inflation stability. i do not think this way of handling the flexibility issue is in any way unique to sweden but instead is fairly typical. one of our