Sweden's Riksbank publishes an Economic Review issue on the evolution of inflation targeting

Sweden's Riksbank released the first 2025 issue of its Economic Review, presenting three articles on how inflation targeting has developed in practice, in theory and in institutional design. The issue combines a synthesis of an Riksbank-hosted research conference on inflation targeting with two longer-form contributions on the framework’s evolution and future direction. The opening article summarises six papers and discussions from the May 2024 Stockholm conference “The quest for nominal stability: Lessons from three decades with inflation targeting”, covering topics including inflation-target governance and accountability when policy rates are constrained by a lower bound, how “flexible” inflation targeting should balance inflation and real-economy stabilisation, the interaction between monetary policy and financial stability, the role of exchange-rate regimes under commodity shocks, and monetary-fiscal interactions including quasi-automatic fiscal stabilisers such as a time-varying value-added tax. The second article reproduces Mervyn King’s “Inflation targets: practice ahead of theory”, which emphasises the institutional and communications foundations of inflation targeting and sets out recommendations for future frameworks, including greater focus on risks around forecasts and renewed attention to monetary variables. The final article by Magnus Jonsson and Anders Vredin reviews 30 years of inflation targeting “from simple to complex”, arguing that post-2008 balance-sheet policies, financial-system frictions, supply-side shocks, reduced policy autonomy, and the emergence of new payment technologies have expanded both the toolkit and the analytical demands of inflation targeting.