In the last few years, the Riksbank has conducted a monetary policy that has led to substantially lower inflation than the inflation target and unnecessarily high unemployment.
The Riksbank is wrong about the debt: Higher policy rates increase rather than decrease the household-debt ratio
Lars E.O. Svensson, 4 September 2013
‘Leaning against the wind’, debt deflation, and the Riksbank
Lars E.O. Svensson, 10 October 2013
A dangerous thing concerning debt is what Irving Fisher (1933) called ”debt deflation.” It is usually described as deflation causing the real value of nominal debt to increase. Loan-to-value and loan-to-income ratios also increase, since the debt is fixed in nominal terms but the nominal value of assets and income fall.
Is the Riksbank neglecting the price-stability objective, counteracting full employment, and increasing household debt?
Lars E.O. Svensson, 9 September 2013
How do we know whether or not the Riksbank is neglecting the price-stability objective? Could it be that the Riksbank is not only neglecting the price-stability objective but is also counteracting the Riksdag’s and the Government’s full-employment objective as well as increasing household indebtedness?
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