Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/82463 
Year of Publication: 
2001
Series/Report no.: 
Sveriges Riksbank Working Paper Series No. 120
Publisher: 
Sveriges Riksbank, Stockholm
Abstract: 
The use of explicit inflation targets has meant that monetary policy has become more transparent and also easier to evaluate. The analysis in this paper is based on forecasts by Sveriges Riksbank (the central bank of Sweden) on real output and inflation. Our purpose is to separate the effects on the interest-rate instrument from (i) discretionary changes in the rule for monetary policy, and (ii) judgements in forecasting. We first feed the Riksbank´s forecasts into two different simple rules for interest-rate policy. The differences between the interest rates implied by these benchmark rules and the actual policy rate are interpreted as measures of policy shocks. Second, we compare the Riksbank´s forecasts with alternative forecasts. Using a benchmark rule for the setting of the policy rate, we can use the differences between the forecasts to define measures of the effects of the Riksbank´s judgements on its interest-rate policy.
Subjects: 
Central bank forecasts
Inflation targeting
Judgmental forecasts
Monetary policy
Policy rules
JEL: 
E37
E42
E52
Document Type: 
Working Paper

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