Material for assessing monetary policy 2010. Figure 2.01. Difference between interbank rates and...

Material for assessing

monetary policy 2010

Figure 2.01. Difference between interbank rates and government bond rates (TED spread)Basis points

0

50

100

150

200

250

300

350

400

450

500

0

50

100

150

200

250

300

350

400

450

500

07 08 09 10 11

Sweden

Euro area

USA

United Kingdom

Sources: Reuters EcoWin and the Riksbank

Note. The spread is calculated as difference between the three-month interbank rate and the three-month treasury bill.

Figure 2.02. Policy ratesPer cent

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

04 05 06 07 08 09 10 11

SwedenEuro areaUSAUnited Kingdom


Figure 2.03. GDP growthAnnual percentage change

-4

-3

-2

-1

0

1

2

3

4

-4

-3

-2

-1

0

1

2

3

4

04 05 06 07 08 09 10

USA

Euro area

Sources: Eurostat and Bureau of Economic Analysis

Figure 2.04. GDP, world Annual percentage change

-1

0

1

2

3

4

5

6

7

-1

0

1

2

3

4

5

6

7

70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10

Sources: IMF and the RiksbankNote. The striped bar refers to the Riksbank’s forecast in the MPR February 2011.

Figure 2.05. Central banks’ balance sheet totalsPer cent of GDP

0

5

10

15

20

25

30

0

5

10

15

20

25

30

Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10

The Riksbank

ECB

Bank of England

Federal Reserve

Sources: Bureau of Economic Analysis, Eurostat, Office for National Statistics, Statistics Sweden and the respective central banks

Figure 2.06. GDPAnnual percentage change

-6

-4

-2

0

2

4

6

-6

-4

-2

0

2

4

6

00 01 02 03 04 05 06 07 08 09 10

Sources: Statistics Sweden and the Riksbank

Figure 2.07. Repo rate with uncertainty bands from the Monetary Policy Update in September 2008Per cent, quarterly averages

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11

90%75%50%Repo rate

Source: The Riksbank

Figure 2.08. UnemploymentPer cent of the labour force, seasonally-adjusted data

0

2

4

6

8

10

12

0

2

4

6

8

10

12

80 84 88 92 96 00 04 08

Unemployment, 16-64 years


Sources: Statistics Sweden and the RiksbankNote. Pre-1993 data has been spliced by the Riksbank.

Figure 2.09. CPI and CPIFAnnual percentage change

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

00 01 02 03 04 05 06 07 08 09 10 11

CPI

CPIF

Source: Statistics Sweden

Figure 2.10. Retail trade index and exports of goodsIndex 2005 = 100, seasonally adjusted data

Source: Statistics SwedenNote. The broken vertical line indicates the date of publication of the Monetary Policy Report, February 2010.

60

70

80

90

100

110

120

130

60

70

80

90

100

110

120

130

00 01 02 03 04 05 06 07 08 09 10

Retail sales index

Export of goods

Figure 2.11. Repo rate outcome and repo rate forecasts in 2010Per cent, quarterly averages

0

1

2

3

4

5

0

1

2

3

4

5

04 05 06 07 08 09 10 11 12 13

Outcome

MPR February, MPU April

MPR July, MPU September

MPR October, MPU December


Note. The repo rate forecasts from February and April coincide and are therefore shown with the aid of a common broken line in the figure. The repo rate forecasts from July and September, like the forecasts from October and December, are so close to one another that they are also illustrated with a common broken line.

Figure 2.12. Repo rate assumptionsPer cent, quarterly averages

0

1

2

3

4

5

0

1

2

3

4

5

04 05 06 07 08 09 10 11 12 13

Main scenarioLower interest rateHigher interest rate

Source: The RiksbankNote. The broken line represents the Riksbank’s forecast in the Monetary Policy Report in February.

Figure 2.13. CPIFAnnual percentage change

0

1

2

3

4

0

1

2

3

4

04 05 06 07 08 09 10 11 12 13

Lower interest rateHigher interest rateMain scenario

Sources: Statistics Sweden and the RiksbankNote. The broken line represents the Riksbank’s forecast in the Monetary Policy Report in February.

Figure 2.14. Hours gapPercentage deviation from the HP trend

-3

-2

-1

0

1

2

3

4

-3

-2

-1

0

1

2

3

4

04 05 06 07 08 09 10 11 12 13


Sources: Statistics Sweden and the RiksbankNote. The broken line represents the Riksbank’s forecast in the Monetary Policy Report in February.

Figure 2.15. World trade volumesWorld trade monitor index, 2000 = 100, seasonally-adjusted data

0

50

100

150

200

250

300

0

50

100

150

200

250

300

90 92 94 96 98 00 02 04 06 08 10

World, total

Advanced economies

Emerging economies

Source: Netherlands Bureau for Economic Policy Analysis

Note. The broken vertical line indicates the date of publication of the Monetary Policy Update in April.

Figure 2.16. GDP in different regions and countriesQuarterly changes in per cent calculated as an annual rate, seasonally-adjusted data

-20

-15

-10

-5

0

5

10

-20

-15

-10

-5

0

5

10

00 01 02 03 04 05 06 07 08 09 10 11 12 13

Sweden

Euro area

USA

Sources: Bureau of Economic Analysis, Eurostat, Statistics Sweden and the Riksbank.

Note. The broken line refers to the Riksbank’s forecasts in July 2010.

Figure 2.17. Net lending in the public sectorPercentage of GDP

-15

-10

-5

0

5

10

-15

-10

-5

0

5

102007

2008

2009

Sources: The IMF and Statistics Sweden


0

1

2

3

4

5

0

1

2

3

4

5

04 05 06 07 08 09 10 11 12 13

Main scenarioLower interest rateHigher interest rate

Source: The RiksbankNote. The broken line represents the Riksbank’s forecast in July 2010.

Figure 2.19. CPIFAnnual percentage change

0

1

2

3

4

0

1

2

3

4

04 05 06 07 08 09 10 11 12 13


Sources: Statistics Sweden and the RiksbankNote. The broken line represents the Riksbank’s forecast in July 2010.

Figure 2.20. CPIAnnual percentage change

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

04 05 06 07 08 09 10 11 12 13



Figure 2.21. Hours gapPercentage deviation from the HP trend

-3

-2

-1

0

1

2

3

4

-3

-2

-1

0

1

2

3

4

04 05 06 07 08 09 10 11 12 13



Figure 2.22. UnemploymentPer cent of the labour force, seasonally-adjusted data

0

2

4

6

8

10

12

0

2

4

6

8

10

12

80 85 90 95 00 05 10



September

July

Sources: Statistics Sweden and the RiksbankNote. Pre-1987 data has been spliced by the Riksbank. The broken line represents the Riksbank’s forecast, 15–74 years.

Figure 2.23. Balance of resourcesQuarterly changes calculated as an annual rate, seasonally-adjusted data

-40

-30

-20

-10

0

10

20

30

-40

-30

-20

-10

0

10

20

30

07 08 09 10

Private consumption

Gross fixed capital formation

Export

Public consumption

Import


Note. Data have been updated with outcomes published in March 2011. In connection with the new outcomes, the historical figures have also been revised.

Figure 2.24. TCW-weighted exchange rateIndex, 18.11.1992 = 100

100

110

120

130

140

150

160

100

110

120

130

140

150

160

04 05 06 07 08 09 10

Source: The RiksbankNote. The broken vertical line indicates the date of publication of the Monetary Policy Report, October 2010.


0

1

2

3

4

5

0

1

2

3

4

5

04 05 06 07 08 09 10 11 12 13

Main scenario

Higher interest rate

Lower interest rate

Source: The RiksbankNote. The broken line represents the Riksbank’s forecast in October 2010.

Figure 2.26. CPIFAnnual percentage change, quarterly averages

0

1

2

3

4

0

1

2

3

4

04 05 06 07 08 09 10 11 12 13

Higher interest rateLower interest rateMain scenario

Sources: Statistics Sweden and the RiksbankNote. The broken line represents the Riksbank’s forecast in October 2010.

Figure 2.27. CPIAnnual percentage change, quarterly averages

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

04 05 06 07 08 09 10 11 12 13


Sources: Statistics Sweden and the RiksbankNote. The broken line represents the Riksbank’s forecast in 2010.

Figure 2.28. Hours gapPercentage deviation from potential level

-3

-2

-1

0

1

2

3

-3

-2

-1

0

1

2

3

04 05 06 07 08 09 10 11 12 13


Sources: Statistics Sweden and the RiksbankNote. The broken line represents the Riksbank’s forecast in the Monetary Policy Report in October 2010.

Figure 2.29. UnemploymentPer cent of labour force

5

6

7

8

9

5

6

7

8

9

04 05 06 07 08 09 10 11 12 13


Lower interest rate

Main scenario

Sources: Statistics Sweden and the RiksbankNote. The broken line represents the Riksbank’s forecast in October 2010.

Figure 2.30. Mean squared gap for forecasts of the hours gap and CPIF inflation, October 2010

Main scenario


Lower interest rate

0.0

0.1

0.2

0.3

0.4

0.5

0.0 0.1 0.2 0.3 0.4 0.5

Hours

gap

CPIF


Note. The hours gap refers to the difference between the actual number of hours worked and the Riksbank’s assessment of the long-term trend for the number of hours worked.

Figure 2:31 Mean squared gap for forecasts of the hours gap and CPI inflation, October 2010

Main scenario


Lower interest rate

0.0

0.1

0.2

0.3

0.4

0.5

0.0 0.1 0.2 0.3 0.4 0.5

Hours

gap

CPI


Note. The hours gap refers to the difference between the actual number of hours worked and the Riksbank’s assessment of the long-term trend for the number of hours worked.

Figure 3.01. CPI, CPIF and CPIF excluding energyAnnual percentage change

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

00 01 02 03 04 05 06 07 08 09 10 11

CPI

CPIF

CPIF excluding energy

Source: Statistics Sweden

Figure 3.02. Inflation expectations among money market participants Annual percentage change

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

04 05 06 07 08 09 10 11 12 13 14 15 16

Sources: Statistics Sweden and TNS SIFO Prospera

Figure 3.03. Inflation expectation in 2010,1,2 and 5 years ahead, all participants' Per cent

0.0

0.5

1.0

1.5

2.0

2.5

0.0

0.5

1.0

1.5

2.0

2.5

Q 1 Q 2 Q 3 Q 4

1 year 2 year 5 year

Source: TNS SIFO Prospera

Figure 3.04. Inflation expectations 5 years ahead, all participants' Per cent

0

1

2

3

4

0

1

2

3

4

96 98 00 02 04 06 08 10

Source TNS SIFO Prospera

Figure 3.05. The Riksbank's inflation forecasts and inflation expectations two years ahead among money market participants in 2010Annual percentage change

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2010, Mars 2010, May 2010, August 2010, November

Money market participant

The Riksbank CPI

Sources: TNS SIFO Prospera and the RiksbankNote. The Riksbank’s forecasts refer to the most recent forecasts that had been published at the time of Prospera’s surveys.

Figure 3.06. GDP gap, hours gap and RU indicatorPer cent

-8

-6

-4

-2

0

2

4

6

-8

-6

-4

-2

0

2

4

6

90 95 00 05 10

Hours gap

GDP gap

RU indicator

Sources: Statistics Sweden and the Riksbank.

Note. The GDP gap refers to the deviation of actual GDP from the GDP trend, calculated using a production function approach. The hours gap refers to the difference between the actual number of hours worked and the Riksbank's assessment of the trend for the number of hours worked. The RU indicator has been normalised so that the mean value is zero and the standard deviation is one.

Figure 3.07. CPI, outcomes and forecasts Annual percentage change

-2

-1

0

1

2

3

4

5

-2

-1

0

1

2

3

4

5

07 08 09 10 11


Note. Quarterly data. The broken lines represent the Riksbank’s forecasts 2008–2010. The blue marks indicate the starting points for the respective forecasts.

Figure 3.08. CPIF, outcome and forecastsAnnual percentage change

0.0

1.0

2.0

3.0

4.0

0.0

1.0

2.0

3.0

4.0

07 08 09 10 11

Outcome

Forecasts


Note. Quarterly data. The Riksbank began to publish forecasts for the CPIF in July 2008. The broken lines represent the Riksbank’s forecasts 2008–2010. The blue marks indicate the starting points for the respective forecasts.

Figure 3.09. GDP growth, outcome and forecasts Annual percentage change

-8

-6

-4

-2

0

2

4

6

8

-8

-6

-4

-2

0

2

4

6

8

07 08 09 10 11


Note. Quarterly data. The broken lines represent the Riksbank’s forecasts 2008–2010. The blue marks indicate the starting points for the respective forecasts.

Figure 3.10. GDP level, outcome and forecastsIndex, 2007 quarter 4 = 100


Note. Quarterly data. The broken lines represent the Riksbank’s forecasts 2008–2010. The blue marks indicate the starting points for the respective forecasts. GDP growth and forecasts are indexed so that quarter 4 2007 = 100.

90

95

100

105

110

90

95

100

105

110

07 08 09 10 11

Figure 3.11. Forecasts for GDP growth 2010Per cent, annual average

-1

0

1

2

3

4

5

6

-1

0

1

2

3

4

5

6

jan-09 apr-09 jul-09 okt-09 jan-10 apr-10 jul-10 okt-10

GDP 2010

Other forecasters

The Riksbank

Sources: National Institute of Economic Research, Statistics Sweden and the Riksbank

Figure 3.12. Forecasts of CPI inflation 2010 Per cent, annual average

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

jan-09 apr-09 jul-09 okt-09 jan-10 apr-10 jul-10 okt-10

CPI 2010

Other forecasters

The Riksbank

Sources: National Institute of Economic Research, Statistics Sweden and the Riksbank

Figure 3.13. GDP growth 2010: Forecasting error and effects of unforeseen shocksPercentage points

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Quarter 1 2010 Quarter 2 2010 Quarter 3 2010 Quarter 4 2010

ProductivityInterest rates abroad and exchange ratesOtherConsumption, investment and public sector consumptionImport effectsGrowth in foreign markets and export marketsForecasting error

Source: The RiksbankNote. Forecasting error refers to deviation between outcome and forecast in MPR July 2009.

Figure 4.01. Forecasting errors for GDP growth 2010 of various forecastersAdjusted mean absolute error and mean error and in percentage points

-2

-1

0

1

2

3

4

-2

-1

0

1

2

3

4Adjusted mean absolute error

Mean error

Sources: National Institute of Economic Research and the Riksbank

Note. LO=Swedish Trade Union Confederation, FiD=Ministry of Finance, SWED=Swedbank, SN=Confederation of Swedish Enterprise, KI=National Institute of Economic Research, SHB=Svenska Handelsbanken, RB=Riksbank and HUI=Swedish Retail Institute.

Figure 4.02. Forecasting errors for GDP growth 2010 of various forecasters Adjusted mean absolute error and mean error and in percentage points

-2

-1

0

1

2

3

4

-2

-1

0

1

2

3

4Adjusted mean absolute error

Mean error

Sources: National Institute of Economic Research and the Riksbank.Note. See the note to Figure 4:1 for an explanation of the abbreviations.

Figure 4.03. Forecasting errors for unemployment 2010 of various forecasters

Adjusted mean absolute error and mean error and in percentage points

-2

-1

0

1

2

3

4

-2

-1

0

1

2

3

4Adjusted mean absoluteerrorMean error


Figure 4.04. Forecasting errors for the repo rate 2010 of various forecasters Adjusted mean absolute error and mean error and in percentage points

-2

-1

0

1

2

3

4

-2

-1

0

1

2

3

4

SWED RB FiD SEB KI MarknF

Adjusted mean absolute error

Mean error

Sources: National Institute of Economic Research and the Riksbank.

Note. FiD=Ministry of Finance, SWED=Swedbank, KI=National Institute of Economic Research, MarkEx=Market expectations and RB=Riksbank. While other forecasters present their repo rate forecasts as a value at the end of the year, the Riksbank presents its forecasts as quarterly average values. In order to make the comparison possible, the Riksbank's quarterly values have been interpolated to daily values.

Figure 4.05. The accuracy of the forecasts for CPI among different forecasters 1999-2010 Adjusted mean absolute error and mean error and in percentage points

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

KI FiD RB Average others

Adjusted mean absoluteerrorMean error

Sources: National Institute of Economic Research and the Riksbank.

Note. KI=National Institute of Economic Research, FiD=Ministry of Finance and RB=Riksbank. Other forecasters are Swedbank, Svenska Handelsbanken, Nordea, SEB, the Swedish Retail Institute, the National Institute of Economic Research, the Confederation of Swedish Enterprise and the Swedish Trade Union Confederation (LO).

Figure 4.06. The accuracy of the forecasts for GDP growth among different forecasters 1999-2010 Adjusted mean absolute error and mean error and in percentage points

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

RB FiD Average others KI


Mean error


Figure 4.07. The accuracy of the forecasts for unemployment among different forecasters 1999-2010Adjusted mean absolute error and mean error and in percentage points

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

KI RB Average others FiD

Adjusted mean absoluteerrorMean error


Figure 4.08. The accuracy of the forecasts for the repo rate among different forecasters 2007-2010 Adjusted mean absolute error and mean error and in percentage points

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

SWED SEB FiD KI RB MarknF


Mean error


Note. Forecasts of the repo rate were not published prior to 2007. See the note to Figure 4:4 for an explanation of the abbreviations.

Figure 5.01. Change in the repo rate and market surprise Percentage points

-2.0

-1.5

-1.0

-0.5

0.0

0.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

Market surprise

Change in the repo rate


Percentage points

Note. Market surprise is measured as the change in a one-month interest rate at the time of the notification.

Figure 5.02. Repo rate expectations measured using market prices, July–December 2009Per cent

0

1

2

3

4

5

0

1

2

3

4

5

06 07 08 09 10 11 12

Repo rate

Market prices July-October

Market prices December


Figure 5.03. Repo rate expectations measured using market prices and surveys, February 2010Per cent

0

1

2

3

4

5

0

1

2

3

4

5

06 07 08 09 10 11 12 13

Repo rateMarket prices after the meetingMarket prices before the meetingRepo rate path December 2009Repo rate path FebruarySurvey, Prospera average, 2010-01-13

Sources: Reuters EcoWin, TNS Sifo Prospera and the Riksbank

Figure 5.04. Repo rate expectations measured using market prices and surveys, July 2010Per cent

0

1

2

3

4

5

0

1

2

3

4

5

06 07 08 09 10 11 12 13

Repo rateMarket prices before the meetingMarket prices after the meetingRepo rate path AprilRepo rate path JulySurvey, Prospera average, 2010-05-26


Figure 5.05. Repo rate expectations measured using market prices and surveys, September 2010Per cent

0

1

2

3

4

5

0

1

2

3

4

5

06 07 08 09 10 11 12 13

Repo rateMarket prices before the meetingMarket prices after the meetingRepo rate path JulyRepo rate path SeptemberSurvey, Prospera average, 2010-08-05


Figure 5.06. Repo rate expectations measured using market prices and surveys, October 2010Per cent

0

1

2

3

4

5

0

1

2

3

4

5

06 07 08 09 10 11 12 13

Repo rate

Market prices before the meeting

Market prices after the meeting

Repo rate path September

Repo rate path October

Survey, Prospera average, 2010-09-29


Figure 5.07. Repo rate expectations measured using market prices and surveys, December 2010Per cent

0

1

2

3

4

5

0

1

2

3

4

5

06 07 08 09 10 11 12 13

Repo rateMarket prices before the meetingMarket prices after the meetingRepo rate path OctoberRepo rate path DecemberSurvey, Prospera average, 2010-11-24


Figure 5.08. Difference between monetary policy expectations according to Prospera and forward ratesPercentage points

-1.0

-0.5

0.0

0.5

1.0

1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

98 00 02 04 06 08 10

1 year ahead

2 years ahead

Sources: TNS Sifo Prospera, Reuters EcoWin and the Riksbank

Note. The data refers to money market agents. Given that surveys provide a reasonable picture of market expectations the difference between surveys and forward rates constitutes a (rough) measure of premiums. Forward rates are calculated from government securities.

using the Nelson-Siegel-Svensson method.

Figure 5.09. Average absolute deviations between forward rates and the repo rate path Percentage points

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

05 06 07 08 09 10

Sweden

Norway

Sources: Norges Bank, Reuters EcoWin and the Riksbank

Figure A1. Estimated forecasting performance for CPI 2010, based on squared forecast errors

-4

-3

-2

-1

0

1

2

3

4

5

-4

-3

-2

-1

0

1

2

3

4

5

Note. LO=Swedish Trade Union Confederation, FiD=Ministry of Finance, SWED=Swedbank, SN=Confederation of Swedish Enterprise, KI=National Institute of Economic Research, SHB=Svenska Handelsbanken, RB=Riksbank and HUI=Swedish

Retail Institute.


Figure A2. Estimated forecasting performance for GDP growth 2010, based on squared forecast errors

-4

-3

-2

-1

0

1

2

3

4

5

-4

-3

-2

-1

0

1

2

3

4

5

Note. See the note to Figure A1 for an explanation of the abbreviations. Sources: National Institute of Economic Research and the Riksbank

Figure A3. Estimated forecasting performance for unemployment 2010, based on squared forecast errors

-4

-3

-2

-1

0

1

2

3

4

5

-4

-3

-2

-1

0

1

2

3

4

5


Figure A4. Estimated forecasting performance for repo rate 2010, based on squared forecast errors

-4

-3

-2

-1

0

1

2

3

4

5

-4

-3

-2

-1

0

1

2

3

4

5

SWED RB FiD SEB KI MarkEx

Note. FiD=Ministry of Finance, SWED=Swedbank, KI=National Institute of Economic Research, MarkEx=Market expectations and RB=Riksbank. While other forecasters present their repo rate forecasts as a value at the end of the year, the Riksbank presents its

forecasts as quarterly average values. In order to make the comparison possible, the Riksbank's quarterly values have been interpolated to daily values. This does not affect the result, however.


Figure A5. Estimated forecasting performance for CPI 1999–2010, based on squared forecast errors

-1.5

-1

-0.5

0

0.5

1

1.5

-1.5

-1

-0.5

0

0.5

1

1.5

FiD Average, others KI RB

Note. KI=National Institute of Economic Research, FiD=Ministry of Finance and RB=Riksbank. Other forecasters are Swedbank, Svenska Handelsbanken, Nordea, SEB, the Swedish Retail Institute, the National Institute of Economic Research, the Confederation of Swedish Enterprise

and the Swedish Trade Union Confederation (LO).


Figure A6. Estimated forecasting performance for GDP growth 1999–2010, based on squared forecast errors

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

RB Average, others FiD KI


Figure A7. Estimated forecasting performance for unemployment 1999–2010, based on squared forecast errors

-1.5

-1

-0.5

0

0.5

1

1.5

-1.5

-1

-0.5

0

0.5

1

1.5

RB Average, others FiD KI


Figure A8. Estimated forecasting performance for repo rate 2007–2010, based on squared forecast errors

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

SEB SWED FiD KI RB MarkEx

Note. Forecasts of the repo rate were not published prior to 2007. See the note to Figure A4 for an explanation of the abbreviations.


Table 3:1. Comparison of different infl ation measures, annual averageAnnual percentage change


2008 2009 2010

CPI 3.4 –0,3 1.3

CPIF 2.7 1.9 2.1

CPIF excluding energy 2 2.3 1.7

Table 3:2. Comparison of inflation and inflation targets in several countries,annual averageAnnual percentage change

Norway United Kingdom New Zealand

Inflationtarget close to 2,5 2 1,0 to 3,0

CPI CPI CPI CPI CPIF

2008 3,8 3,6 4.0 3.4 2.7

2009 2,2 2,2 2,1 –0,3 1.9

2010 2,4 3,3 2,3 1.3 2.1

2

Sweden

Sources: Ecowin and the Riksbank

Note: In Norway, the target is formulated as inflation close to 2.5 per cent over time, while, in New Zealand, it is formulated as

inflation of between 1 and 3 per cent on average over the medium term. The measures of inflation in the various countries are the

measures designated “CPI” in the official statistics of each country. However, the exact definition of the CPI measure varies somewhat between the countries. For example, in the United Kingdom, CPI is the same as the measure usually designated harmonised index of

consumer prices (HICP). However, the CPI measures of Norway, the United Kingdom or New Zealand are not impacted by the direct

effects of changes of the policy rate through mortgage costs, as is the case in Sweden.

Table 3:3 Production and measures of employment 2008-2010, annual averageAnnual percentage change

2008 2009 2010

GDP -0.6 -5.3 5.5

Employed, aged 15-74 1.1 -2.1 1.0

Number of hours worked 0.8 -2.9 2.5

Unemployment, aged 15-74* 6.2 8.3 8.4

*Per cent of labour force


Table 4:1. The accuracy of the forecastsAdjusted mean absolute error in percentage points


The Riksbank 0.51 0.48 1.19 1.34 0.44 0.51

Ministry of Finance 0.45 0.46 1.20 1.41 0.45 0.56

National Institute of Economic Research 0.45 0.44 1.26 1.42 0.42 0.51

Others (average) 0.53 0.50 1.25 1.41 0.45 0.52

CPI GDP Unemployment

1999-2009 1999-2010 1999-2009 1999-2010 1999-2009 1999-2010

Table 4:2. Mean absolute error and root mean squared error for repo-rate forecasts at different forecast horizons, 2007-2010


One quarter One year Two years One quarter One year Two years

The Riksbank 0.24 1.51 3.42 0.52 2.14 3.55

Market expectations 0.28 1.44 3.39 0.54 2.02 3.54

Mean abolute error Root mean squared error

Material for assessing monetary policy 2010. Figure 2.01. Difference between interbank rates and...

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