Wickman-Parak: Economic analysis requires a cool head – my view of developments in Sweden and abroad
"Monetary policy must be based on forecasts, and basing these on disaster scenarios is not reasonable", said Deputy Governor of the Riksbank Barbro Wickman-Parak on Tuesday. She was holding a speech at Luleå City Hall, where she described her views on the economic situation in Sweden and abroad.
The euro crisis is now affected by the results of the elections in Greece, which have created unease on the global financial markets. This has in turn led to other debt-ridden countries, such as Spain, also being affected by greater concern. However, Ms Wickman-Parak considered it reasonable to assume that the euro crisis will be resolved in an orderly manner, so that an economic downswing like the one in the wake of the Lehman Brothers crash in autumn 2008 can be avoided.
She also considered it important not to have blind faith in the accuracy of the measures we use to assess the economic situation. Moreover, it is important not to draw too far-reaching conclusions from the constant inflow of new statistics. "We should not read too much into individual figures, but gradually adapt our forecasts as new statistics justify a change. At the same time, we must of course be prepared to make large adjustments if the circumstances so require. But monetary policy should normally be conducted gradually, while keeping a cool head", said Ms Wickman-Parak.
Read the entire speech in the PDF file.
