Under the influence of traumatic events, new ideas, economic experts and the ICT revolution - the economic policy and macroeconomic performance of Sweden in the 1990s and 2000s
AbstractThe new economic-policy regime in Sweden in the 1990s included deregulation, central-bank independence, inflation targets and fiscal rules but also active labour market policy and voluntary incomes policy. This article describes the content, determinants and performance of the new economic policy in Sweden in a comparative, mainly Nordic, perspective. The new economic policy regime is explained by the deep recession and budget crisis in the early 1990s, new economic ideas, EU integration and the power of economic experts. In the 1998-2007 period, Sweden displayed relatively low inflation and high productivity growth, but unemployment was high, especially by national standards. The restrictive monetary policy was responsible for the low inflation and the dynamic ICT sector was decisive for the productivity miracle. Furthermore, productivity increases in the ICT sector largely explains why the Central Bank undershot its inflation target in the late 1990s and early 2000s. The new economic-policy regime in Sweden performed well during the global financial crisis. However, as in other OECD countries the moderate increase in unemployment was largely attributed to labour hoarding. And the rapid recovery of the Baltic countries made it possible for Sweden to avoid a bank crisis.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2011:25.
Length: 98 pages
Date of creation: 30 Aug 2011
Date of revision:
Contact details of provider:
Postal: Department of Economics, Stockholm, S-106 91 Stockholm, Sweden
Phone: +46 8 16 20 00
Fax: +46 8 16 14 25
Web page: http://www.ne.su.se/
More information through EDIRC
Swedish model; Swedish economic policy; Swedish Central Bank; economic experts; Sweden’s macroeconomic performance; financial crisis; new economic-policy regime;
Find related papers by JEL classification:
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- 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
- E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-05 (All new papers)
- NEP-CBA-2011-09-05 (Central Banking)
- NEP-EEC-2011-09-05 (European Economics)
- NEP-HIS-2011-09-05 (Business, Economic & Financial History)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daunfeldt, Sven-Olov & de Luna, Xavier, 2002. "Central Bank Independence and Price Stability: Evidence from 23 OECD-countries," UmeÃ¥ Economic Studies 589, Umeå University, Department of Economics, revised 12 Jun 2003.
- Stephen Nickell & Luca Nunziata & Wolfgang Ochel, 2005. "Unemployment in the OECD Since the 1960s. What Do We Know?," Economic Journal, Royal Economic Society, vol. 115(500), pages 1-27, 01.
- Bennmarker, Helge & Carling, Kenneth & Holmlund, Bertil, 2005.
"Do Benefit Hikes Damage Job Finding? Evidence from Swedish Unemployment Insurance Reforms,"
Working Paper Series
2005:15, Uppsala University, Department of Economics.
- Helge Bennmarker & Kenneth Carling & Bertil Holmlund, 2007. "Do Benefit Hikes Damage Job Finding? Evidence from Swedish Unemployment Insurance Reforms," LABOUR, CEIS, vol. 21(1), pages 85-120, 03.
- Bennmarker, Helge & Carling, Kenneth & Holmlund, Bertil, 2005. "Do benefit hikes damage job finding? Evidence from Swedish unemployment insurance reforms," Working Paper Series 2005:22, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Helge Bennmarker & Kenneth Carling & Bertil Holmlund, 2005. "Do Benefit Hikes Damage Job Finding? Evidence from Swedish Unemployment Insurance Reforms," CESifo Working Paper Series 1460, CESifo Group Munich.
- Jean-Philippe Cotis & Jonathan Coppel, 2005. "Business Cycle Dynamics in OECD Countries: Evidence, Causes and Policy Implications," RBA Annual Conference Volume, in: Christopher Kent & David Norman (ed.), The Changing Nature of the Business Cycle Reserve Bank of Australia.
- Assar Lindbeck, 1997. "The Swedish Experiment," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1273-1319, September.
- Olivier J. Blanchard & Jordi Gali, 2007.
"The Macroeconomic Effects of Oil Shocks: Why are the 2000s So Different from the 1970s?,"
NBER Working Papers
13368, National Bureau of Economic Research, Inc.
- Blanchard, Olivier J & Galí, Jordi, 2008. "The Macroeconomic Effects of Oil Shocks: Why are the 2000s so Different from the 1970s?," CEPR Discussion Papers 6631, C.E.P.R. Discussion Papers.
- Jonung, Lars & Fregert, Klas, 2008.
"Inflation Targeting Is a Success, So Far: 100 Years of Evidence from Swedish Wage Contracts,"
Economics - The Open-Access, Open-Assessment E-Journal,
Kiel Institute for the World Economy, vol. 2(31), pages 1-25.
- Fregert, Klas & Jonung, Lars, 2008. "Inflation Targeting Is a Success, So Far: 100 Years of Evidence from Swedish Wage Contracts," Economics Discussion Papers 2008-24, Kiel Institute for the World Economy.
- Magnus Gustavsson, 2008. "A New Picture Of Swedish Earnings Inequality: Persistent And Transitory Components, 1960-1990," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 324-349, 09.
- Gylfason, Thorvaldur, 1991. "Introduction," European Economic Review, Elsevier, vol. 35(2-3), pages 209-211, April.
- George A. Akerlof & William T. Dickens & George L. Perry, 2000. "Near-Rational Wage and Price Setting and the Long-Run Phillips Curve," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 1-60.
- Bertil Holmlund, 2009. "The Swedish unemployment experience," Oxford Review of Economic Policy, Oxford University Press, vol. 25(1), pages 109-125, Spring.
- Daniel Leigh & Etibar Jafarov, 2007. "Alternative Fiscal Rules for Norway," IMF Working Papers 07/241, International Monetary Fund.
- Per Lundborg & Hans Sacklén, 2006. "Low-inflation Targeting and Long-run Unemployment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(3), pages 397-418, October.
- Espen Erlandsen & Jens Lundsgaard, 2007. "How Regulatory Reforms in Sweden have boosted Productivity," OECD Economics Department Working Papers 577, OECD Publishing.
- Bernd Hayo & Carsten Hefeker, 2001. "Do We Really Need Central Bank Independence? A Critical Re- examination," Macroeconomics 0103006, EconWPA.
- Lennart Erixon, 2010.
"The Rehn-Meidner Model in Sweden: Its Rise, Challenges and Survival,"
Journal of Economic Issues,
M.E. Sharpe, Inc., vol. 44(3), pages 677-715, September.
- Erixon, Lennart, 2008. "The Rehn-Meidner Model in Sweden: Its Rise, Challenges and Survival," Research Papers in Economics 2008:2, Stockholm University, Department of Economics.
- Magnus Gustavsson, 2007. "The 1990s rise in Swedish earnings inequality -- persistent or transitory?," Applied Economics, Taylor & Francis Journals, vol. 39(1), pages 25-30.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sten Nyberg).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.