The researchers created a model to study how changes in monetary policy affect inflation and output in Sweden. They used real data from 1995 to 2014 to estimate the model and then simulated different scenarios to see how the economy responds to shocks. The results show that both inflation and output are influenced by future expectations, and the Central Bank adjusts its policies gradually. By optimizing the policy rule, they found that stabilizing interest rates, output, and inflation from a target level is important for the Central Bank.