argument in favour of transparency that i believe should not be underestimated. it is that by being open and clear towards the outside world we also become better in our analysis within the walls of the riksbank. as transparency makes it easier to evaluate how well monetary policy functions, it quite simply increases the incentives for us to do a good job. the objections are not convincing however, not everyone is agreed that transparency is a general blessing. academic research shows both advantages and disadvantages with transparency. a theoretical result from this research that has received much attention is that more public information from central banks and other authorities can in some cases be a negative element 2. however, this result is based on the public information being of low quality. if the economic agents attach greater importance to poor public information than to their own better private information, the economy as a whole may suffer losses. however, this assumes that the public information is much poorer than the agents ’ own information – an assumption that is hardly true in practice 3. a more reasonable assumption, in any case with regard to central banks and monetary policy, is that public information is not poorer than the assessments made by private agents. central banks probably invest greater resources than any individual agent into studying the economy, assessing the economic situation and making forecasts. reasonably, central banks should also know more about their own intentions than any other agent. it is therefore possible to construct theoretical cases where a lower degree of transparency is preferable to a higher degree. but on the whole the research appears to indicate quite clearly that a high degree of transparency is something the central banks should aim at. it is easy to agree with this conclusion. here i think that the demands on a public authority in a democracy have great importance. then i believe that in practice there are limits as to how transparent a central bank can be. in some respects it is quite simply difficult to be open and clear. this applies, for example, to how much emphasis the central bank places on stabilising the real economy relative to stabilising inflation. in theoretical models this is usually represented by a special parameter in the central bank ’ s so - called goal function. however, placing a value on this parameter which is then published would probably be morris, s. and h. s. shin, ( 2002 ), " the social value of public information ”, american economic review 92, 1521 - 1534. svensson, l. e. o., ( 2006 ), “ social value

). see marazzi et al. ( 2005 ) for a more detailed discussion. bis central bankers ’ speeches the effects on the economy of the real exchange rate when the general public discusses exchange rates, this usually means the nominal exchange rate. however, economists are more focused on the real exchange rate, which shows the price of foreign goods expressed in swedish kronor against the price of swedish goods in kronor. in other words, the real exchange rate reflects sweden ’ s purchasing power and competitiveness. the stronger the real exchange rate becomes, the greater purchasing power a swedish krona will have abroad. at the same time, a stronger real exchange rate means that swedish - produced goods will be more expensive compared with foreign goods, and competitiveness will thus decrease. the real exchange rate is the one that is most important to the real economy ; the nominal exchange rate should primarily be regarded as an asset price that affects the real exchange rate over the relatively short term. as figure 5 shows, the nominal and real exchange rates have co - varied closely during the inflation - targeting regime. the explanation for this is that, as i mentioned, exchange rates that are determined freely by the market tend to be volatile. at the same time, most of sweden ’ s trading partners have monetary policy frameworks resembling our own, so inflation rate differences are generally fairly minor. the nominal exchange rate can change rapidly, but prices generally move more slowly. all in all, this means that short - term fluctuations in the real exchange rate, to a large extent, are driven by variations in the nominal exchange rate. movements in the nominal exchange rate were smaller before 1992, when sweden had a fixed exchange - rate regime, even if the devaluations carried out during the 1970s and 1980s led to relatively large fluctuations. however, even during periods with fixed nominal exchange rates, large fluctuations took place in the real exchange rate. these were driven by bis central bankers ’ speeches differences in inflation rates between sweden and the rest of the world. between 1982 and 1992, the real exchange rate strengthened markedly, with swedish competitiveness being undermined considerably as a result. changes in the real exchange rate mainly affect the economy via net exports, in which a weakening of the real exchange rate tends to increase net exports. slightly simplified, it could be said that higher net exports lead to increased resource utilisation, higher wage growth and thus to higher inflationary pressures. the exchange rate effects arising in inflation via net exports can thus be seen