The article examines how changes in monetary policy affect the economy in Sweden. They studied the shift from focusing on exchange rates to targeting inflation in 1993. The results show that under the old policy, the economy reacted more to exchange rate movements, while under the new policy, it responded more to inflation. Switching to inflation targeting would have led to higher output and employment, but also to a weaker currency, higher inflation, and more economic volatility. Ignoring this policy change when analyzing the data can lead to misleading results about the effects of monetary policy.