Scandinavian Working Papers in Economics

Working Paper Series,
Sveriges Riksbank (Central Bank of Sweden)

No 429: Monetary policy in Sweden after the end of Bretton Woods

Emma Bylund, Jens Iversen () and Anders Vredin
Additional contact information
Emma Bylund: Monetary Policy Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Jens Iversen: Monetary Policy Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Anders Vredin: Monetary Policy Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden

Abstract: This paper discusses how monetary policy in Sweden has evolved since 1973. We provide a chronology of the different monetary policy regimes in place during the past fifty years and identify two main regimes, the pegged-but-adjustable exchange rate regime (1973 – 1992) and the inflation targeting regime (1993 – 2022). Inflation in Sweden has been more stable under the inflation targeting regime than under both the Bretton Woods system, and the pegged-but-adjustable exchange rate regime. GDP growth was higher and more stable during the Bretton Woods System. We argue that inflation targeting was implemented according to the simple text book version only during a short period, 1999-2007. We illustrate that economic developments in Sweden have in many respects been similar to that of Denmark. Lastly, we identify and discuss recurrent themes in the discussions of monetary policy under inflation targeting.

Keywords: monetary policy; inflation targeting; exchange rate regimes

JEL-codes: E42; E52; E58; E65

Language: English

63 pages, November 1, 2023

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