| 1. |
- Andersson, Fredrik N G, et al.
(författare)
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European Stabilization Policy After the Covid-19 Pandemic: More Flexible Integration or More Federalism?
- 2022
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- Crises are a major driving force behind cooperation in the European Union. This holds also for monetary and fiscal policy. During severe crises, cooperation has been enlarged and intensified. The recent covid-19 pandemic is a clear example of this pattern. The pandemic has had huge impact on the conduct of stabilization policies in the EU. Public debt has grown rapidly in many EU member states. The ECB has carried out a highly expansionary monetary policy. In this paper, we discuss the implications for the EU of a move towards increased fiscal federalism following the pandemic. First, the role of crises as a driver of political change is analysed. Next, we examine in greater detail, the effect of crises on the design of stabilisation policies in the EU since the introduction of the euro, the common currency. Finally, we discuss the significance of the recent pandemic-induced steps towards increased federalism for the EU. We raise the question as to whether this is a desirable path for the future of European cooperation.
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| 2. |
- Andersson, Fredrik N G, et al.
(författare)
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How Tolerant Should Inflation-Targeting Central Banks Be? Selecting the Proper Tolerance Band : Lessons from Sweden
- 2017
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- Should an inflation-targeting central bank have an explicit tolerance band around its inflation target? This paper provides an answer derived from the Swedish experience. The Riksbank is exceptional in the sense that it first adopted and later abolished an explicit band and is currently considering bringing it back. We conclude that the band should be explicit for several reasons. Most important, an inflation-targeting central bank should be open and transparent to the public regarding its actual ability to control inflation. We discuss how a numerical measure of the proper width of the band can be constructed to foster communication and credibility.
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| 3. |
- Andersson, Fredrik N G, et al.
(författare)
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Iceland should replace its central bank with a currency board
- 2018
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- Since its independence in 1918, Iceland has tried a number of monetary regimes. They have all failed to provide monetary stability. Iceland is too small to conduct an independent monetary policy. What should Iceland do? We arrive at the conclusion that a currency board with the euro as the reserve currency is the best choice. A currency board delivers monetary stability through exchange rate stability. In contrast, a flexible exchange rate for Iceland serves as a chock amplifier. However, a currency board requires domestic reforms preferably before it is established to enhance price and wage flexibility as well as proper regulations of the financial system to minimize the risk of future financial crises.
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| 4. |
- Andersson, Fredrik N G, et al.
(författare)
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Lessons for Iceland from the Monetary Policy of Sweden
- 2018
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- The purpose of this report is to derive lessons from inflation targeting in Sweden for the choice of the future monetary policy regime of Iceland. Swedish inflation targeting has been a success in terms of reducing inflation and inflation volatility, but real economic volatility is not lower compared to previous periods. In addition, financial imbalances have grown rapidly. A key lesson is that the Riksbank has closely shadowed the policy of the European Central Bank due to financial integration. In other words, the Riksbank has behaved as if Sweden had a fixed exchange rate to the euro. Our analysis clearly indicates that a small economy cannot pursue an independent monetary policy from the rest of the world in a financially integrated world. Consequently, we suggest a fixed exchange rate arrangement for Iceland, preferably through a currency board. A currency board would provide exchange rate and price stability. A currency board would require domestic reforms to enhance price and wage flexibility as well as proper regulations on the financial system to minimize the risk of future banking crises.
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| 5. |
- Andersson, Fredrik N G, et al.
(författare)
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Lessons from the Swedish Experience with Negative Central Bank Rates
- 2020
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- Negative interest rates were once seen as impossible outside the realm of economic theory. However, several central banks have recently adopted negative policy rates. The Federal Reserve is coming under increasing pressure to follow suit in the wake of the coronavirus crisis. This paper investigates the actual effects of negative interest rates using the Swedish experience from 2015 to 2019. The Swedish Riksbank was one of the first central banks to introduce a negative interest rate in 2015 and the first central bank to abandon a negative rate in 2019. We find that negative rates had a modest effect on consumer price inflation due to globalization, but significant effects on the exchange rate and domestic asset prices, thus fostering financial imbalances. We conclude by discussing the implications of our results for larger economies such as the United States.
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| 6. |
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| 7. |
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| 8. |
- Andersson, Fredrik N G, et al.
(författare)
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Remissvar om promemorian "Byte av målvariabel och introduktion av variansband" från Lunds Universitet
- 2017
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- Lunds universitet har uppmanats att lämna ett yttrande på rubricerad remiss. Universitet avger härmed följande synpunkter som utarbetats vid Ekonomihögskolan av docent Fredrik NG Andersson och professor emeritus Lars Jonung. Lars Jonung var medlem av Finanspolitiska Rådet och dess ordförande 2012-13.Lunds universitet välkomnar i stort de två förändringar av inflationsmålet som Riksbanken har föreslagit. Övergången från konsumentprisindex (KPI) till ett index med fast bostadsränta (KPIF) samt införandet av ett variationsband är två steg i rätt riktning. Förändringen kommer främst ha effekt på Riksbankens kommunikation med allmänheten, men kan på sikt även leda till en mer välavvägd penningpolitik.Universitetet ser dock två svagheter när det kommer till variationsbandet. Bandet är för smalt samt ses av Riksbanken enbart som ett kommunikationsverktyg. Riksbanken bör överväga att bredda intervallet samt vid behov utnyttja bandet for att stabilisera inte enbart konsumentpriser utan även samhällsekonomin. Nedan ftiljer en diskussion av valet av prisindex samt av variationsbandet storlek.
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| 9. |
- Andersson, Fredrik N G, et al.
(författare)
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The Covid-19 Lesson from Sweden: Don’t Lockdown
- 2023
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- The coronavirus pandemic triggered strong political action across Europe. Mandatory restrictions to increase social distancing were imposed, commonly known as lockdowns. In some cases, entire countries were virtually locked down for several weeks at a time, contributing to a very severe downturn in economic activity. To mitigate the policy induced economic crisis, governments responded by introducing expansionary fiscal and monetary measures to support businesses and households.One country, Sweden, served as an outlier. It restricted the spread of the virus primarily through voluntary measures rather than strict lockdowns. In this study, we compare the health and economic outcomes in Sweden with those of comparable Western European countries. We answer the question of whether the Swedish policy of using voluntary social-distancing measures led to a better or worse outcome compared to those countries relying on extensive lockdowns.Our results clearly show that the benefits of the lockdown policy on the excess death rate was at best limited, while the economic costs were significant. The Swedish policy of advice and trust in the population to act responsibly was relatively successful. Unlike most other Western European countries, Sweden managed to combine one of the lowest excess death rates with relatively small economic costs. Furthermore, Sweden’s fiscal position remained remarkably strong during and after the pandemic, in sharp contrast to the fiscal deterioration in those countries that pursued more stringent lockdown policies.While we make no claims of presenting a comprehensive study that covers all possible dimensions of a complex question, the macroeconomic outcome suggests an overreaction, if not panic, among policymakers in many Western European countries. Future policymakers should rely on empirical evidence instead of panicking and adopting extreme measures. The panicked implementation of strict measures during the pandemic did far more harm than good—even if policymakers were appearing to act in a decisive and rapid way for the best interests of society.
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| 10. |
- Andersson, Fredrik N G, et al.
(författare)
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The Return of the Original Phillips curve? An Assessment of Lars E. O. Svensson's Critique of the Riksbank's Inflation Targeting, 1997-2012
- 2014
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- We examine Lars E O Svensson's prominent critique of the monetary policy of the Sveriges Riksbank (the Swedish central bank) from 1995-2012. Our main objection concerns Svensson's conclusion that the original pre-Friedman/Phelps version of the Phillips curve based on constant inflation expectations has returned for Sweden. Based on estimates of this model, Svensson claims that that the Riksbank's policy has contributed to an average of 38 000 more unemployed a year between 1997-2011. This result is based on Svensson's unrealistic as well as unnecessary assumption of constant inflation expectations anchored at the Riksbank's inflation target of 2 per cent. Data show, however, that the public's inflation expectations have varied between 0 and 4 per cent, thus they have not been anchored. The negative employment effect found by Svensson vanishes once actual data on inflation expectations are included in the estimates of the Phillips curve. The long run non-vertical Phillips curve is transformed into a vertical one, in line with the Friedman/Phelps theory. We have additional objections to Svensson's reasoning. First, we show that the Riksbank has on average met its inflation target between 1995 and 2012. Second, we suggest that the original Phillips curve is too simple a model to draw any firm policy conclusions about unemployment and monetary policy in a small open economy such as Sweden. Third, we do not want to overburden Swedish monetary policy by making the Riksbank responsible for three objectives. It has already two objectives: price stability and financial stability. Criticising the Riksbank for employment losses, as Svensson does, gives priority to a third objective, high employment. Finally, Svensson adopts a short-term perspective by focusing on the period 1995-2011. When we compare the Riksbank's inflation targeting regime with previous monetary policy regimes over the past 100 years, inflation targeting in the past fifteen years is clearly one of the most successful.
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