Depression in the north - boom and bust in Sweden and Finland, 1985-93
AbstractA comparison of the boom-and-bust cycle of Sweden and Finland during 198593 reveals remarkable similarities. We examine macroeconomic developments during the period with a special emphasis on asset market developments. The seeds of the crisis were »traditional» Nordic problems combined with the consequences of late deregulation of financial markets. We identify five factors that were present in both countries and that account for the depth of the downturn: an »ordinaly» cyclical downturn, a real interest rate shock, asset price deflation with balance sheet consolidation, financial fragility and slow structural adjustment. Differences in policy response are analyzed.
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Bibliographic InfoArticle provided by Finnish Economic Association in its journal Finnish Economic Papers.
Volume (Year): 9 (1996)
Issue (Month): 1 (Spring)
Find related papers by JEL classification:
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
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