Why leaning against the wind is the wrong monetary policy for Sweden

Lars E.O. Svensson, 5 July 2014

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There is a lively ongoing debate about whether raising interest rates beyond the level needed to stabilise prices – ‘leaning against the wind’ – is a justified modification of flexible inflation targeting (as discussed in Smets 2013). In a new paper, I explain why leaning against the wind is the wrong monetary policy for Sweden (Svensson 2014).

Topics: Monetary policy
Tags: lean vs clean, Leaning against the wind, Riksbank

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