Contemplations of an interest-rate dove and inflation hawk

Interesting title of an interesting speech by Per Jansson, DG of Riksbank.

He says he is a combination of inflation hawk and interest rate dove!

Those who follow the media reporting on monetary policy have probably noted that I have been considered the most dovish member of the Riksbank’s Executive Board for some time. By this, I mean that I am considered to be the one who, at least for the time being, is inclined to conduct the most expansionary policy. For anyone unfamiliar with the terminology, the opposite of a dove is a hawk, someone who instead advocates a tighter monetary policy.An alternative terminology that is common in theoretical models is that a hawkish policy instead attaches
considerable importance to the inflation target and gives less weight to other things.1

So actually, as I think it is justified to prioritise the inflation target and confidence in it, I could also be considered a hawk. More precisely, I could be described as a combination of an inflation hawk and an interest-rate dove.


More importantly, he points how the inflation target and flexible exchange rate combination has worked for Sweden:

Describing the orientation of monetary policy-makers in ornithological terms is rather practical. Apparently, however, it is not entirely uncomplicated and misses some subtle differences. I would therefore like to start by elaborating on my view of current monetary policy and my reasoning at the most recent monetary policy meetings.

The picture given in the monetary policy minutes can easily become a little compressed and I would therefore like to provide a slightly more comprehensive and cohesive account here. After that, I intend to address slightly more fundamental issues. More specifically, I would like to give my view of the advantages of the current framework, with an inflation target and a floating exchange rate. I feel that the debate over the last few years has been biased towards emphasising the disadvantages of this system and that the positive aspects have been overshadowed or perhaps even entirely forgotten. I think it is good to remind people of these now and again.


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