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Swedish Model: Short Retrospective Analysis

Author

Listed:
  • Baltatescu Ionela
  • Alexandra Rusu

Abstract

The present article summarizes arguments, but also historical and statistical data supporting the following theses: (a) in the mid-twentieth century Sweden has become one of the most prosperous and fast-growing economies in the world promoting free-market, free trade and a favorable business environment; (b) the establishment of the welfare state and the enforcement of radical welfare reforms in Sweden resulted in only two decades in economic downturn: unsustainable financial situation of the public finances (by increasing government spending and public debt), inflation and macroeconomic policies that generated a boom bust business cycle and economic crisis; (c) the economic principles of the Swedish model (folkhemmet) and the radical vision of welfare policies were generally abandoned or weakened in the post-crisis period in Sweden. Economic policies and reforms enforced after 1990 reflects this new approach: lower government expenditures, lower taxes and the liberalization or the reform of certain markets that were traditionally under state monopoly; (d) Swedish model is one of the best examples of how economic freedom fosters economic growth and development, whereas radical welfare policies and reforms destroys the very foundations of wealth creation: private property and free market.

Suggested Citation

  • Baltatescu Ionela & Alexandra Rusu, 2015. "Swedish Model: Short Retrospective Analysis," Revista de Economie Mondiala / The Journal of Global Economics, Institute for World Economy, Romanian Academy, vol. 7(4).
  • Handle: RePEc:iem:journl:v:4:y:2015:id:2822000009561051
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    File URL: http://www.iem.ro/rem/index.php/REM/article/view/223/280
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