Conducting Monetary Policy with a Collegial Board: The New Swedish Legislation One Year On

In this paper we discuss the recent experience of conducting monetary policy with a collegial board according to the Riksbank act. Interest rate decisions are normally taken with the aim to bring inflation in line with the 2 per cent inflation target one to two years ahead. When there are dissenting views in the Executive Board, the majority rule serves as a formal aggregation rule. Disagreements on the inflation outlook have occurred due to different opinions on the relation between growth and inflation, the current state of the economy and the future outlook for exogenous determinants of inflation. By publishing inflation reports and minutes from meetings with the Executive Board, good incentives are provided to both the staff and the Executive Board to do their best and it also ensures accountability on the part of the Executive Board for achievement of the price stability objective.