Central banks should focus on supply risks – Riksbank governor
Thedéen says recent years’ shocks were not demand-driven and neither are today’s geopolitical tensions
The Sveriges Riksbank governor has said central banks should analyse supply-side risks instead of focusing solely on the demand side.
In a speech today (May 16) Erik Thedéen said many of the economic shocks of recent years – including the pandemic, the Ukraine war, high inflation and the tensions resulting from US tariffs – had been related to supply issues.
“In cases of supply shock, a trade-off must be made between stabilising inflation and production,” he said. Thedéen called on central banks
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