developments and inflation would look if we did not change the repo rate. it was a simple way of explaining whether or not the repo rate needed to be changed. but at the same time it meant that the forecasts could not be expected to be particularly accurate. the assumption of an unchanged repo rate was in most cases unrealistic and also made it difficult to produce consistent forecasts. this was one of the reasons why we changed over at present the central banks in iceland, norway, new zealand and sweden publish their own paths for the policy rate. in autumn 2005 to basing our assessments on the assumption that the repo rate would develop in line with market expectations. but although this was a more realistic assumption, it was still the case that the forecasts did not necessarily reflect the riksbank ’ s assessment of the most probable economic development. this is because market expectations do not necessarily agree with the interest rate path the riksbank considers to be most appropriate. now that our analyses are based on our own path for the repo rate, they describe the course of events we are actually expecting to see. this has several advantages. for one thing, it is possible to say something about how accurate our forecasts have been and how well the riksbank has done its job. and for another thing it will also be easier to internally evaluate and improve the models and methods of working used as a basis for our forecasts. finally, it makes it more worthwhile to compare our picture of the economy with the picture painted by other forecasters. reasoning and considerations made clearer the second advantage of an own interest rate forecast is that it becomes easier to show why we believe in a particular policy and how we reason when we make our decisions. we will have a better internal base for making decisions. in addition, if we manage to succeed in communicating how we see the driving forces behind economic developments and also the objective and effects of monetary policy, it will also be easier for others to assess how new information will affect the future development of the repo rate. if it becomes clearer to the general public and financial market agents how we view future interest rate developments, this will give us better tools for influencing expectations of the future repo rate. by affecting expectations of short - term interest rates, we as the central bank can also indirectly affect interest rates with a slightly longer duration, which in turn increases the effect of monetary policy. as i said, monetary policy largely works by influencing expectations of

where the economy was in a state of chaos following the napoleonic wars, and confidence in the monetary system was low. the previous joint currency with denmark had col - lapsed, and attempts to restore it had failed. it took a long time before the newly established norges bank managed to create credibility for the norwegian currency. in the first years of its existence, the bank ’ s main tasks included managing silver tax payments and handling receipts, printing and distributing banknotes and bookkeeping. in january 1817 it was the only bank in the country. it received deposits, but charged a fee for that service. thus, today ’ s situation with depositors having to pay for keeping their money in the bank is not entirely a new phenomenon. in the 1870s norway joined a currency union with denmark and sweden that lasted until the outbreak of the first world war. the scandinavian countries enjoyed strong economic growth during this period. large cross - border capital flows supported the industrialization of the scandinavian countries, and financial integration driven by the gold standard and the currency union was probably a contributing factor to the favourable development. both sweden and nor - way were relatively poor countries situated on the outskirts of europe when norges bank was founded 200 years ago, but with the advent of industrialization in the late bis central bankers ’ speeches 19th century both countries began their journeys to become two of the richest nations in the world. economic and political developments in norway and sweden have also showed similar patterns in the period since the second world war. the role of the central banks was very limited in both sweden and norway. the monetary policy decisions were made by the government and norges bank became more of a technical implementer of government policy. for much of the 1970s and 1980s, economic policy in both norway and sweden lacked a long term strategy and credibility. inflation and wages soared, and lost competitiveness resulted in repeated devaluations. in 1982, after a large devaluation of the swedish krona, it was declared that there would be no more devaluations. the same thing hap - pened in norway in 1986, when the norwegian krone was devalued for the tenth time in a decade. interest - rate setting once again became the genuine responsibility of norges bank. we have also shared similar problems regarding the lending spree that started in the mid - 1980s, and ended in a systematic banking crisis and in the worst re - cession since the 1930s. both countries experienced solid economic growth and very rapid credit