Skingsley: Thoughts on technology and the economy

Technological innovations, international competition and demographic developments are helping to redesign the playing field for the economy and thus the way in which economic policy is conducted. ”In Sweden, we have historically been quite good at managing changes and seeing the possibilities. But even if Sweden has experienced an upswing with 240,000 more people in employment over the last three years, technological innovations and international competition are entailing a transformation in which jobs are vanishing and need to be replaced by new ones.” These were the words of Deputy Governor Cecilia Skingsley when she visited Handelsbanken in Södertälje on Monday.

Date: 26/03/2018 12:00

Speaker: Deputy Governor Cecilia Skingsley

Place: Handelsbanken, Nygatan 18, Södertälje

What is special for Sweden is that we have become many more on the labour market. This increase is largely due to high immigration but also to changed rules and reforms on the labour market. There is therefore greater competition for vacant jobs, restraining the rate of wage increases. Ms Skingsley's assessment was nevertheless that there are overarching cyclical forces that suggest wages will rise over the next few years, but that the rate of increase may be low despite the high level of resource utilisation.

Monetary policy may contribute towards facilitating the various adjustments demanded by structural transformation and demographics by holding resource utilisation up as far as is compatible with the inflation target.

"A world experiencing many changes also needs a few clear game rules so that parties in the economy can take well-grounded economic decisions. Price stability is one such game rule. The alternative, which would lead to inflation developing more unsteadily, would be a poor contribution from monetary policy to Swedish society," Ms Skingsley concluded.

Updated 26/03/2018