Lars E.O. Svensson

Lars Svensson served as deputy governor of Sweden's Riksbank from 2007 to 2013, where he consistently voted for more aggressive monetary easing than the majority and publicly dissented. He resigned citing disagreement with what he viewed as an overly tight monetary policy that was causing unnecessary unemployment. Svensson is known for influential academic research on optimal monetary policy, inflation targeting, the Taylor rule, and the conditions under which negative interest rates may be appropriate. He has been a prominent academic voice for unconventional monetary policy tools. His research on "targeting rules" for monetary policy — arguing that central banks should commit to policy rules that optimize social welfare outcomes rather than simple instrument rules — has influenced the theoretical foundations of modern inflation targeting frameworks adopted by central banks worldwide. He has also written on the cost-benefit analysis of so-called lean-against-the-wind monetary policy, arguing that using interest rates to contain financial stability risks imposes large unemployment costs for very small financial stability benefits.