the wind. one needs to assume not just that the riksbank has lied about its motives, but also that well - known and prominent external economic analysts have said one thing but really meant another. nevertheless, this is the starting point for the counterfactual analysis many appear to rely on when drawing conclusions about the riksbank ’ s monetary policy. 8 in sweden, this analysis has been given considerable scope, for instance on dagens nyheter newspaper ’ s editorial pages, where the riksbank ’ s policy has been described as more or less incomprehensible and contrary to the prevailing opinion at that time – an ” interest - rate increasing experiment in summer 2010 ”. 9 one might think it is strange that the claim that the riksbank ’ s repo - rate increases were only about leaning against the wind, and moreover that the increases were made contrary to prevailing opinion, has become so widely spread. after all, one does not need to make a more in - depth check of the facts than i have provided here to see that neither claim is correct. it doesn ’ t require very much digging to be able to conclude that not only the riksbank but also external domestic and international economic analysts found it natural, even after the repo rate had been raised to 2 per cent, that the increases would continue – and this without any particular reference to household debt. according to, for instance, dagens nyheter newspaper ’ s editorial pages, the policy was instead “ an interest - rate increasing experiment ”, based on the riksbank governors spreading “ misleading pictures of the future ”. 10 the only explanation i can think of for this claim nevertheless being repeated and referred to so often and so uncritically, is that people simply assume that it must be true because it has been expressed with such emphasis and intensity. a hazardous policy but claiming that it has all been about leaning against the wind is not only a misleading description of the policy conducted and the motives behind it. there is also good reason to wonder whether a policy whereby the repo rate had remained unchanged since the crisis might not have been rather risky, regardless of what one claims it would have represented. according to the counterfactual analysis, there were only gains and no problems : inflation would have been close to the target and employment would have been higher if the repo rate had not been raised. but i also believe that there would have been a major risk of other, less

stability of the real economy more favourable. as the central bank's inflation forecasts in the short and medium terms may deliberately deviate from the target, it is also interesting to compare inflation expectations with the central bank's inflation forecasts. if the economic agents share the central bank ’ s view of how inflation will approach the target, inflation expectations at different time horizons should be close to the central bank ’ s forecasts. the degree of correspondence between inflation expectations and the central bank's inflation forecasts then becomes a measure of how credible the central bank's inflation forecasts and analyses are. such a correspondence between expectations and forecasts is of course also desirable for forecasts for the real economy and, not least, for forecasts for the policy rate, which i will now discuss. was the implementation of monetary policy effective? i have spoken earlier about what characterises efficient monetary policy decisions. this was in relation to the balance between stabilising inflation and stabilising the real economy given the information available at the time of the decision. another important aspect is to investigate how effective the implementation of monetary policy has been, in the sense of affecting the economy in the desired direction and to the right amount. an effective implementation of monetary policy presupposes that there is a high level of private - sector confidence in the central bank with regard to both the inflation target and the monetary policy analysis. it also requires that the central bank is successful in communicating its analysis and intentions. in other words, a precondition for an effective monetary policy implementation is that the central bank is open and transparent. most central banks use a short - term interest rate as the policy rate to implement monetary policy. however, the actual policy rate in the two months prior to the next monetary policy decision plays a very minor role in the economy. expectations regarding future policy rates, on the other hand, do play an important role. they affect interest rates with longer maturities which in turn are the interest rates that have an impact on the economic decisions of households and companies. the riksbank and a few other central banks have taken this seriously and publish their own policy rate paths to facilitate the formation of expectations regarding future policy rates and to influence these expectations more effectively. if the central bank is successful in its communication, the market participants should be able to predict rather well how new information or new shocks will affect the central bank's forecast for the policy rate. if the central bank's analysis is credible,