Nobel Laureate and Princeton University professor Paul Krugman said that Sweden’s central bank should delay plans for interest rate increases to avoid aggravating a significant housing bubble, Bloomberg reports.

A low repo rate would limit risks of falling house prices and allow inflation to erode record household debt levels

“It’s possible, I would even say probable, that Sweden has a significant housing bubble and it does have a high level of household debt,” he he said in an interview in Stockholm after speaking at a Skagen Funds conference.

“But given the borrowing has already happened and where you are right now the household debt issue is only made worse if you raise interest rates. It’s only made worse if you allow the economy to slide in deflation, so at this point what you want is an expansionary monetary policy to offset the risks of a housing decline or of a debt problem.”