Öberg: Potential GDP, resource utilisation and monetary policy
First Deputy Governor Svante Öberg is participating in Statistics Sweden’s annual conference in Saltsjöbaden. The theme of the conference is productivity, organisation and human capital. On Thursday, Mr Öberg will participate in a panel discussion on measuring productivity, where he will present his opening speech on the difficulties in estimating potential GDP and resource utilisation. This speech also describes his assessment of resource utilisation and the significance of resource utilisation for monetary policy.
Mr Öberg demonstrates the difficulty in estimating potential GDP and resource utilisation. He indicates that different methods give different results and that, at present, it is particularly difficult to make estimates due to the financial crisis and the deep recession from which we are presently emerging. However, despite the difficulties in making such estimates, Mr Öberg argues that potential GDP has probably declined as a result of the crisis and that, given the Riksbank’s current forecasts, resource utilisation expressed as the GDP gap will have closed by 2013. He also discusses the significance of resource utilisation for inflation and current monetary policy. Mr Öberg observes that there is no simple link between a specific measure of resource utilisation and a specific measure of inflation, but, when resource utilisation increases, inflationary pressures will also increase over time.
Read the whole speech in the PDF file below.
