## Inflation targeting and leaning against the wind

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---

### Abstract — core conclusion and quantitative comparison
- Question: Should inflation targeting involve some leaning against the wind?
- Leaning against the wind: a tighter monetary policy than is justified for stabilising inflation around an inflation target and resource utilisation around a long-run sustainable rate, advocated to counter rapid credit growth and rising asset prices.
- Sweden case study: the Riksbank has been leaning against the wind quite aggressively since the summer of 2010, citing concerns about household indebtedness measured by the household debt-to-income (DTI) ratio.
- Cost vs benefit (summary):
  - Cost: inflation much below the target and unemployment arguably as much as 1,2 percentage points higher than necessary.
  - Benefit (Riksbank’s own calculations): miniscule — expressed as a lower expected future unemployment rate, the benefit is only about 0,004 of the cost in the form of a higher unemployment rate over the next few years.
  - Additional effect: much lower inflation than expected has substantially increased households’ debt burden — since the fall of 2011, the real value of a given loan has become almost 6 per cent larger than if inflation had been on target.
- JEL codes: E52, E58, G21.

### Flexible inflation targeting — framework and operational measure
- Goals of standard flexible inflation targeting:
  - Stabilise inflation around the inflation target.
  - Stabilise resource utilisation around a long-run sustainable rate.
- Operational assumption for discussion:
  - Use the unemployment rate as the measure of resource utilisation; stabilising resource utilisation means stabilising unemployment around an estimated long-run sustainable rate.
- Central question restated: should standard flexible inflation targeting be combined with some degree of leaning against the wind?

### Definition and prerequisites for leaning against the wind
- Leaning against the wind implies bias toward somewhat tighter policy to avoid financial imbalances and threats to financial stability (Bank for International Settlements 2014).
- Two key presumptions required:
  1. Macroprudential instruments or polices are ineffective.
  2. A higher policy rate has a significant negative impact on threats to financial stability.
- Author’s assessment:
  - Presumption (1) varies by country.
  - Presumption (2) has little theoretical and empirical support in general, though it may depend on financial sector structure (competitive vs oligopolistic), shadow banking importance, etc.
  - Conclusion: difficult to generalise — each country must be scrutinised before judging whether leaning against the wind is warranted.

### Case study: Sweden — facts, policy actions, and balance-sheet context
- Riksbank policy: leaning against the wind since summer 2010 due to concerns about household indebtedness (DTI ratio).
- Household balance-sheet developments (since 1971; summary of levels):
  - Since the mid-1990s the DTI ratio has almost doubled to a little above 170 per cent currently.
  - Total assets (excluding collective insurance savings) have doubled to about 600 per cent of disposable income.
  - Net wealth has increased to about 420 per cent of disposable income.
  - Including collective insurance savings: total assets about 720 per cent and net wealth about 540 per cent of disposable income.
  - Real assets (owner-occupied houses and flats as well as leisure homes) have increased to about 320 per cent of disposable income.
- Macroprudential measures introduced or announced in Sweden:
  - Mortgage loan-to-value (LTV) cap of 85 per cent (introduced October 2010).
  - Higher capital-adequacy requirements for systemically-important banks.
  - Higher risk weights on mortgages.
  - Recommendations on individually adjusted amortisation plans from mortgage lenders.
  - Finansinspektionen monitors lending standards, borrowers’ debt-service capacity, and resilience to increased mortgage rates, unemployment and housing-price falls.
- Institutional framework change (August 2013):
  - Finansinspektionen assigned main responsibility for micro- and macroprudential policy and control of related instruments, including the countercyclical capital buffer.
  - Creation of a Financial Stability Council chaired by the Minister of Financial Markets, with Director Generals of Finansinspektionen and the Swedish National Debt Office and the Governor of the Riksbank as members.
- Implication: presumption (1) (that macroprudential instruments are ineffective) does not seem to apply in Sweden.

### Transmission of policy rate to household debt — theory and Swedish specifics
- General transmission:
  - A higher policy rate typically reduces housing prices and nominal mortgage debt, and reduces the price level and nominal disposable income.
  - Real debt = nominal debt / price level. DTI ratio = nominal debt / nominal income.
  - Because a higher policy rate affects both numerators and denominators, the net effect on real debt and the DTI ratio is ambiguous a priori.
- Swedish specifics (Svensson 2013b):
  - Only a fraction of the mortgage stock turns over each year; average loan length of a mortgage is about seven years.
  - Little amortisation during loan lengths implies nominal debt is sticky.
  - Therefore, a higher policy rate is likely to have a slower impact on nominal debt than on the price level and nominal disposable income.
  - Likely result: a higher policy rate is more likely to increase real debt and the DTI ratio than to decrease them, although the impact on the ratios is likely to be small.
  - Long-run impact of monetary policy on these ratios is likely to be zero, since ratios between nominal variables are real variables on which monetary policy normally has no long-run effect.

### Counterfactual experiment using the Riksbank’s Ramses DSGE model
- Method: compare actual outcomes to counterfactual outcomes if monetary policy had been easier, using Ramses; combine with Svensson (2013b) results on policy-rate impact on the DTI ratio.
- Counterfactual specification:
  - Policy rate kept constant at 0,25 per cent from the summer of 2010.
- Counterfactual outcomes (summary):
  - CPIF inflation would have stayed very close to the target of 2 per cent.
  - Unemployment might have been about 1,2 percentage points lower.
  - DTI ratio might have been a bit lower, around 170 per cent of disposable income instead of around 173 per cent.
  - Conclusion: difference in the DTI ratio is too small to have any impact on associated risks.

### Evaluation of timing: ex ante vs ex post perspectives
- Ex post: the counterfactual experiment suggests the Riksbank’s exit from the low policy rate was premature.
- Ex ante (real time) information available in June 2010:
  - Riksbank forecasts for CPIF inflation and unemployment and FOMC forecasts for PCE/core PCE inflation and unemployment were both below/above targets and sustainable rates.
  - Both central banks’ inflation forecasts were below the 2 per cent target.
  - Both central banks’ unemployment forecasts were significantly above their estimated long-run sustainable rates.
  - FOMC response: kept federal funds rate between 0 per cent and 0,25 per cent and prepared QE2.
  - Riksbank response: started to raise the policy rate in contrast to the FOMC.
- Conclusion: given the June 2010 information, the Riksbank’s decision to start raising the policy rate was hardly justified.

### Riksbank’s own estimates and the cost–benefit assessment
- The Riksbank (Sveriges Riksbank 2014a; 2014b) has presented:
  - Estimates of the impact of the policy rate on household real debt and the DTI ratio.
  - Estimates of the impact of alternative policy-rate paths on inflation and unemployment.
- These published Riksbank estimates enable an assessment of the relative costs and benefits of leaning against the wind using the Riksbank’s own numbers.

### The cost of a higher policy rate — effect on unemployment
- Quantified cost:
  - A 1-percentage-point higher policy rate during four quarters leads to about a 0,5-percentage-point higher unemployment rate during the next few years (based on Sveriges Riksbank (2014b, figures 2:13 and 2:15)).
  - This 0,5-percentage-point increase in unemployment is the primary quantified cost to be compared with any benefits.

### Benefits: reduced probability of a crisis
- Schularick and Taylor (2012): a 1-percentage-point lower annual growth of real debt for five years (that is, 5 per cent lower real debt in five years) would, everything else equal, reduce the probability of a crisis by 0,4 percentage points.
- Sveriges Riksbank’s estimate: a 1-percentage-point higher policy rate during four quarters results in 0,25 per cent lower real debt in five years (black line in Figure 5 for quarter 20).
- Combination implies:
  - Reduction of crisis probability = 0,25*0,4/5 = 0,02 percentage points.
  - Converting to expected unemployment (using Riksbank’s assumption of a crisis unemployment increase of about 5 per cent):
    - A fall in crisis probability of 0,02 percentage points = 0,0002 in probability terms.
    - Expected future unemployment falls by 0,0002*5 = 0,001 percentage points.
- Conclusion: benefit from a lower probability of a crisis (0,001 percentage points lower expected future unemployment) is miniscule relative to the cost of 0,5 percentage points higher unemployment over the next few years.
- Long-run: Riksbank’s estimates show the policy rate has no effect on real debt in the long run and thus no long-run risk reduction from this channel.

### Benefits: reduced severity of a crisis
- Empirical inputs:
  - Riksbank Deputy Governor Martin Flodén (2014, Table 1, Column 2): a 1-percentage-point lower DTI ratio might, all else equal, result in the increase in the unemployment rate in a crisis being 0,02 percentage points lower.
  - Sveriges Riksbank (2014a, Figure A22): a 1-percentage-point higher policy rate during four quarters would lead to a 0,44-percentage-point lower DTI ratio in five years (black line in Figure 6 for 20 quarters).
- Combined effect if crisis occurs in five years:
  - 0,44*0,02 = 0,009 percentage points lower increase in unemployment.
- Adjusting for crisis probability:
  - If crisis probability = 4 per cent (average in Schularick and Taylor (2012)), expected lower increase in unemployment = 1/25 of 0,009 = 0,00036 percentage points.
  - If crisis probability = 10 per cent (one crisis every 10 years), expected lower increase in unemployment = 0,009*0,10 = 0,0009 percentage points.
- Both estimates are insignificant.
- Long-run: policy rate has no effect on the DTI ratio in the long run per Riksbank estimates.

### Adding up: total expected benefits versus costs
- Total expected lower future unemployment from both channels (using the higher 10 per cent crisis probability for the severity channel):
  - 0,001 + 0,0009 = 0,0019 percentage points.
- Comparison with cost:
  - 0,0019 is completely insignificant compared with the cost of 0,5 percentage points higher unemployment over the next few years.
- Total benefit as a share of the cost:
  - 0,0038 (Table 1 summary: cost 0,5; benefit because of lower probability 0,001; because of smaller increase in crisis 0,0009; total benefit 0,0019).
- Caveats:
  - Riksbank’s estimated effects are not statistically significant; VAR model may be misspecified and effects could be zero or of opposite sign.

### Effect of inflation below expectations on real debt
- Household expectations and outcomes:
  - Households’ one-year-ahead inflation expectations lagged one year have exceeded actual CPI inflation over the past few years (Figure 7), meaning actual inflation has fallen much below household expectations.
- Real value example (Figure 8):
  - For a SEK 1 million loan taken out in November 2011:
    - If inflation had been 2 per cent, in September 2014 the real value would have fallen to SEK 945 000.
    - Actual real value in September 2014 remained at SEK 1 million because inflation was close to zero.
    - The increase in real value due to inflation falling below 2 per cent is SEK 55 000 in September 2014.
- Aggregate implications:
  - The real value of mortgages about three years old has become almost 6 per cent larger compared to if inflation had equalled 2 per cent (Svensson 2013a).
  - This almost 6 per cent increase in real debt over less than three years is almost 24 times larger (and opposite in sign) than the Riksbank’s estimated reduction in real debt of 0,25 per cent in five years.
  - Using Schularick and Taylor (2012) coefficients, this increase implies:
    - An increase in the probability of a crisis of more than 0,4 percentage points (versus the 0,02 percentage points reduction from the policy-rate channel).
    - Using a 5-percentage-point crisis unemployment increase, it implies an increase in expected future unemployment of more than 0,02 percentage points (versus the 0,001 percentage points reduction).
  - Figure 9: loans taken out in fall 2011 show almost 6 per cent increase in real value to September 2014; loans taken out in 2002 show more than 8 per cent increase.

### Conclusion and policy implications
- Main conclusions:
  - According to the Riksbank’s own estimates, monetary policy has a very small effect on risks associated with household indebtedness.
  - The potential benefit of leaning against the wind is, per these estimates, completely insignificant compared to the large costs of higher unemployment and lower inflation.
  - Riksbank’s leaning against the wind has led to inflation much below household inflation expectations, increasing the real value of nominal debt—mortgages about three years old are almost 6 per cent larger in real terms compared to if inflation had been 2 per cent—likely making household indebtedness problems worse.
- Policy implication for Sweden:
  - Leaning against the wind via policy rates is not an effective way to limit household debt; macroprudential policies are more effective.
  - Since August 2013 Finansinspektionen has the main responsibility and accountability for financial stability under a strengthened framework.
- Generalization:
  - It seems unlikely in other economies that the policy rate would be an effective measure to materially affect household indebtedness and manage associated risks; macroprudential policies are most likely the effective tool.

*Foreword and section "7. The cost of a higher policy rate" from "Inflation targeting and leaning against the wind" — Lars E O Svensson.*

### Foreword

### Inflation targeting and leaning against the wind

### Abstract — core conclusion and quantitative comparison
- Question: Should inflation targeting involve some leaning against the wind?
- Leaning against the wind: a tighter monetary policy than is justified for stabilising inflation around an inflation target and resource utilisation around a long-run sustainable rate, advocated to counter rapid credit growth and rising asset prices.
- Sweden case study: the Riksbank has been leaning against the wind quite aggressively since the summer of 2010, citing concerns about household indebtedness measured by the household debt-to-income (DTI) ratio.
- Cost vs benefit (summary):
  - Cost: inflation much below the target and unemployment arguably as much as 1,2 percentage points higher than necessary.
  - Benefit (Riksbank’s own calculations): miniscule — expressed as a lower expected future unemployment rate, the benefit is only about 0,004 of the cost in the form of a higher unemployment rate over the next few years.
  - Additional effect: much lower inflation than expected has substantially increased households’ debt burden — since the fall of 2011, the real value of a given loan has become almost 6 per cent larger than if inflation had been on target.
- JEL codes: E52, E58, G21.

### Flexible inflation targeting — framework and operational measure
- Standard flexible inflation targeting aims to:
  - Stabilise inflation around the inflation target.
  - Stabilise resource utilisation around a long-run sustainable rate.
- Operational assumption for discussion: the unemployment rate is used as the measure of resource utilisation; stabilising resource utilisation means stabilising unemployment around an estimated long-run sustainable rate.
- Central question restated: should standard flexible inflation targeting be combined with some degree of leaning against the wind?

### Definition and prerequisites for leaning against the wind
- Leaning against the wind implies bias toward somewhat tighter policy to avoid financial imbalances and threats to financial stability (Bank for International Settlements 2014).
- Two key presumptions required:
  1. Macroprudential instruments or polices are ineffective.
  2. A higher policy rate has a significant negative impact on threats to financial stability.
- Author’s assessment:
  - Presumption (1) varies by country.
  - Presumption (2) has little theoretical and empirical support in general, though it may depend on financial sector structure (competitive vs oligopolistic), shadow banking importance, etc.
  - Conclusion: difficult to generalise — each country must be scrutinised before judging whether leaning against the wind is warranted.

### Case study: Sweden — facts, policy actions, and balance-sheet context
- Riksbank policy: leaning against the wind since summer 2010 due to concerns about household indebtedness (DTI ratio).
- Household balance-sheet developments (since 1971; summary of levels):
  - Since the mid-1990s the DTI ratio has almost doubled to a little above 170 per cent currently.
  - Total assets (excluding collective insurance savings) have doubled to about 600 per cent of disposable income.
  - Net wealth has increased to about 420 per cent of disposable income.
  - Including collective insurance savings: total assets about 720 per cent and net wealth about 540 per cent of disposable income.
  - Real assets (owner-occupied houses and flats as well as leisure homes) have increased to about 320 per cent of disposable income.
- Macroprudential measures introduced or announced in Sweden:
  - Mortgage loan-to-value (LTV) cap of 85 per cent (introduced October 2010).
  - Higher capital-adequacy requirements for systemically-important banks.
  - Higher risk weights on mortgages.
  - Recommendations on individually adjusted amortisation plans from mortgage lenders.
  - Finansinspektionen monitors lending standards, borrowers’ debt-service capacity, and resilience to increased mortgage rates, unemployment and housing-price falls.
- Institutional framework change (August 2013):
  - Finansinspektionen assigned main responsibility for micro- and macroprudential policy and control of related instruments, including the countercyclical capital buffer.
  - Creation of a Financial Stability Council chaired by the Minister of Financial Markets, with Director Generals of Finansinspektionen and the Swedish National Debt Office and the Governor of the Riksbank as members.
- Implication: presumption (1) (that macroprudential instruments are ineffective) does not seem to apply in Sweden.

### Transmission of policy rate to household debt — theory and Swedish specifics
- A higher policy rate typically reduces housing prices and nominal mortgage debt, and reduces the price level and nominal disposable income.
- Real debt = nominal debt / price level. DTI ratio = nominal debt / nominal income.
- Because a higher policy rate affects both numerators and denominators, the net effect on real debt and the DTI ratio is ambiguous a priori.
- Key Swedish specifics (from Svensson 2013b):
  - Only a fraction of the mortgage stock turns over each year; average loan length of a mortgage is about seven years.
  - Little amortisation during loan lengths implies nominal debt is sticky.
  - Therefore, a higher policy rate is likely to have a slower impact on nominal debt than on the price level and nominal disposable income.
  - Likely result: a higher policy rate is more likely to increase real debt and the DTI ratio than to decrease them, although the impact on the ratios is likely to be small.
  - Long-run impact of monetary policy on these ratios is likely to be zero, since ratios between nominal variables are real variables on which monetary policy normally has no long-run effect.

### Counterfactual experiment using the Riksbank’s Ramses DSGE model
- Method: compare actual outcomes to counterfactual outcomes if monetary policy had been easier, using Ramses; combine with Svensson (2013b) results on policy-rate impact on the DTI ratio.
- Counterfactual specification shown:
  - Counterfactual path: policy rate kept constant at 0,25 per cent from the summer of 2010.
  - Counterfactual outcomes (summary):
    - CPIF inflation would have stayed very close to the target of 2 per cent.
    - Unemployment might have been about 1,2 percentage points lower.
    - DTI ratio might have been a bit lower, around 170 per cent of disposable income instead of around 173 per cent.
    - Conclusion: difference in the DTI ratio is too small to have any impact on associated risks.

### Evaluation of timing: ex ante vs ex post perspectives
- Ex post (after the fact): the counterfactual experiment suggests the Riksbank’s exit from the low policy rate was premature.
- Ex ante (real time) assessment: relevant information available in June 2010 included Riksbank forecasts for CPIF inflation and unemployment and FOMC forecasts for PCE/core PCE inflation and unemployment.
  - Both central banks’ inflation forecasts were below the 2 per cent target.
  - Both central banks’ unemployment forecasts were significantly above their estimated long-run sustainable rates.
  - FOMC response: kept federal funds rate between 0 per cent and 0,25 per cent and prepared QE2.
  - Riksbank response: started to raise the policy rate in contrast to the FOMC.
  - Conclusion: given the June 2010 information, the Riksbank’s decision to start raising the policy rate was hardly justified.

### Riksbank’s own recent estimates and the cost–benefit assessment
- The Riksbank (Sveriges Riksbank 2014a; 2014b) has presented:
  - Its estimates of the impact of the policy rate on household real debt and the DTI ratio.
  - Estimates of the impact of alternative policy-rate paths on inflation and unemployment.
- These published Riksbank estimates enable an assessment of the relative costs and benefits of leaning against the wind using the Riksbank’s own numbers (author uses these in subsequent analysis).

*Foreword from "Inflation targeting and leaning against the wind" — Lars E O Svensson.*

### 7. The cost of a higher policy rate

### 7. The cost of a higher policy rate

### Cost: effect on unemployment
- A 1-percentage-point higher policy rate during four quarters leads to about a 0,5-percentage-point higher unemployment rate during the next few years (based on Sveriges Riksbank (2014b, figures 2:13 and 2:15)).  
- This 0,5-percentage-point increase in unemployment is the primary quantified cost of a higher policy rate to be compared with any benefits.

### Benefits: reduced probability of a crisis (8.1)
- Schularick and Taylor (2012): a 1-percentage-point lower annual growth of real debt for five years (that is, 5 per cent lower real debt in five years) would, everything else equal, reduce the probability of a crisis by 0,4 percentage points.
- Sveriges Riksbank’s estimate: a 1-percentage-point higher policy rate during four quarters results in 0,25 per cent lower real debt in five years (black line in Figure 5 for quarter 20).
- Combining these estimates implies a reduction of the probability of a crisis by 0,25*0,4/5 = 0,02 percentage points.
- Converting to expected unemployment (using Riksbank’s assumption of a crisis unemployment increase of about 5 per cent):  
  - A fall in crisis probability of 0,02 percentage points = 0,0002 in probability terms.  
  - Expected future unemployment falls by 0,0002*5 = 0,001 percentage points.
- Conclusion: the benefit from a lower probability of a crisis (0,001 percentage points lower expected future unemployment) is miniscule relative to the cost of 0,5 percentage points higher unemployment over the next few years.
- Long-run: Riksbank’s estimates show the policy rate has no effect on real debt in the long run and thus no long-run risk reduction from this channel.

### Benefits: reduced severity of a crisis (8.2)
- Riksbank Deputy Governor Martin Flodén (2014, Table 1, Column 2): a 1-percentage-point lower DTI ratio might, all else equal, result in the increase in the unemployment rate in a crisis being 0,02 percentage points lower.
- Sveriges Riksbank (2014a, Figure A22): a 1-percentage-point higher policy rate during four quarters would lead to a 0,44-percentage-point lower DTI ratio in five years (black line in Figure 6 for 20 quarters).
- Combined effect on crisis severity if crisis occurs in five years: 0,44*0,02 = 0,009 percentage points lower increase in unemployment.
- Adjusting for crisis probability:  
  - If crisis probability = 4 per cent (average in Schularick and Taylor (2012)), expected lower increase in unemployment = 1/25 of 0,009 = 0,00036 percentage points (insignificant).  
  - If crisis probability = 10 per cent (one crisis every 10 years), expected lower increase in unemployment = 0,009*0,10 = 0,0009 percentage points (still insignificant).
- Long-run: the policy rate has no effect on the DTI ratio in the long run per Riksbank estimates.

### Adding up (9)
- Total expected lower future unemployment from both channels (using the higher 10 per cent crisis probability for the severity channel): 0,001 + 0,0009 = 0,0019 percentage points.
- Comparison with cost: 0,0019 is completely insignificant compared with the cost of 0,5 percentage points higher unemployment over the next few years.
- Total benefit as a share of the cost: 0,0038 (Table 1 summary: cost 0,5; benefit because of lower probability 0,001; because of smaller increase in crisis 0,0009; total benefit 0,0019).
- Riksbank’s estimated effects are not statistically significant; VAR model may be misspecified and effects could be zero or of opposite sign.

### Effect of inflation below expectations (10)
- Households’ one-year-ahead inflation expectations lagged one year have exceeded actual CPI inflation over the past few years (Figure 7), meaning actual inflation has fallen much below household expectations.
- Real value example (Figure 8): for a SEK 1 million loan taken out in November 2011:  
  - If inflation had been 2 per cent, in September 2014 the real value would have fallen to SEK 945 000.  
  - Actual real value in September 2014 remained at SEK 1 million because inflation was close to zero.  
  - The increase in real value due to inflation falling below 2 per cent is SEK 55 000 in September 2014.
- Result: the real value of mortgages about three years old has become almost 6 per cent larger compared to if inflation had equalled 2 per cent (Svensson 2013a).
- This almost 6 per cent increase in real debt over less than three years is almost 24 times larger (and opposite in sign) than the Riksbank’s estimated reduction in real debt of 0,25 per cent in five years.
- Using Schularick and Taylor (2012) coefficients, this increase implies an increase in the probability of a crisis of more than 0,4 percentage points (versus the 0,02 percentage points reduction from the policy-rate channel), and using a 5-percentage-point crisis unemployment increase, it implies an increase in expected future unemployment of more than 0,02 percentage points (versus the 0,001 percentage points reduction).
- Figure 9: loans taken out in fall 2011 show almost 6 per cent increase in real value to September 2014; loans taken out in 2002 show more than 8 per cent increase.

### Conclusion (11)
- According to the Riksbank’s own estimates, monetary policy has a very small effect on risks associated with household indebtedness.
- The potential benefit of leaning against the wind is, per these estimates, completely insignificant compared to the large costs of higher unemployment and lower inflation.
- Riksbank’s leaning against the wind has led to inflation much below household inflation expectations, increasing the real value of nominal debt—mortgages about three years old are almost 6 per cent larger in real terms compared to if inflation had been 2 per cent—likely making household indebtedness problems worse.
- Policy implication for Sweden: leaning against the wind via policy rates is not an effective way to limit household debt; macroprudential policies are more effective. Since August 2013 Finansinspektionen has the main responsibility and accountability for financial stability under a strengthened framework.
- Generalization: it seems unlikely in other economies that the policy rate would be an effective measure to materially affect household indebtedness and manage associated risks; macroprudential policies are most likely the effective tool.

*Lars E O Svensson — 7. The cost of a higher policy rate (section from provided PDF chapter)*

### References

### inflation-targeting-and-leaning-against-the-wind-paper-sarb - References

### Overview
- This page is the References section for the paper and documents the bibliographic sources cited.
- Source types included (as presented): international organization reports, central bank reports and boxes in Monetary Policy Reports, academic journal articles, working papers, blog posts, and a government press release.

### Purpose and use
- Provides the documentary basis for the paper’s assertions, empirical evidence, and policy discussion.
- Enables verification of cited material and follow-up reading on topics such as monetary policy, household debt, financial stability, and the interaction between credit cycles and crises.

*inflation-targeting-and-leaning-against-the-wind-paper-sarb - References (PDF)*

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_Source: http://larseosvensson.se/files/papers/inflation-targeting-and-leaning-against-the-wind-paper-sarb.pdf_