The interest rate is set by the central bank with a view to securing a nominal anchor for the economy in the long term. The setting of interest rates is based on evaluations of economic trends and the balance of risks. In some periods, the assessment of economic prospects and the balance of...

Svensson (2004) suggested that a monetary policy committee of a central bank (MPC) should "find an instrument-rate path such that projections of inflation and output gap 'look good'." Academic literature on monetary policy gives guidance as to what the words "look good" means. However, there is...

Monetary policy works mainly through private agents' expectations. How precisely future policy intentions are communicated has, according to theory, implications for the outcome of monetary policy. Norges Bank has gone further than most other central banks in communicating its policy intentions....

Many institutions in a democratic society wield important power by virtue of the decisions they make. These decisions may concern individuals or have a more general impact on society. It goes without saying today that this exercise of power must be accounted for. A supreme court's reasoning is...

I demokratiske samfunn utøver ulike institusjoner gjennom beslutninger viktig samfunnsmakt. Beslutningene kan rette seg mot enkeltindivider eller ha en mer generell samfunnsmessig virkning. Det er en selvfølge i dag at slik maktutøvelse må være begrunnet. Høyesteretts begrunnelse er gitt...

The topic I am going to discuss here is how to treat the exchange rate assumption when making projections under an inflation targeting regime. The central bank of Norway made the official change to inflation targeting in March 2001, and my talk is based on our experience since then.

[...] Norges Bank's macro models have played a key role in forecasting work over many years. Inflation targeting probably places greater demands on our understanding of the way the economy functions than earlier regimes, such as (strict) exchange rate targeting. Developments in economics and...

When professor Lars E. O. Svensson (Princeton University) visited Norges Bank's conference on monetary policy in 2004, he suggested we should "find an instrument-rate path such that projections of inflation and output gap 'look good'." We took on the challenge of how to translate the theoretical...

The transition to inflation targeting, which took place in Norway in 2001, may perhaps at the time have appeared to be a transition to a new and unfamiliar monetary policy system. Inflation targeting has, after just a few years, resulted in changes in the way central banks work and not least in...

The interest rate forecast plays a key role in the communication of monetary policy in Norges Bank. We give a comprehensive overview of the Bank's communication with focus on the interest rate forecast. The main arguments for publishing the interest rate forecast are discussed. The arguments are...