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A role model for the conduct of fiscal policy? Experiences from Sweden

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  • Flodén, Martin

Abstract

Sweden was hit by a severe macroeconomic crisis in the early 1990s. GDP fell for three consecutive years in 1991–1993, unemployment increased by 9 percentage points, banks had to be nationalized, and public budget deficits exceeded 10 percent of GDP. The recovery was however quick. GDP growth was around four percent in 1994–1995, and budget deficits had been eliminated by 1998. Growth remained high in the subsequent decade, and the government debt ratio was reduced by almost 50 percent of GDP.

Suggested Citation

  • Flodén, Martin, 2013. "A role model for the conduct of fiscal policy? Experiences from Sweden," Journal of International Money and Finance, Elsevier, vol. 34(C), pages 177-197.
  • Handle: RePEc:eee:jimfin:v:34:y:2013:i:c:p:177-197
    DOI: 10.1016/j.jimonfin.2012.11.010
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    Cited by:

    1. Ruy Lama & Juan Pablo Medina Guzman, 2015. "Fiscal Consolidation During Times of High Unemployment; The Role of Productivity Gains and Wage Restraint," IMF Working Papers 15/262, International Monetary Fund.
    2. Jonung, Lars, 2014. "The Swedish Experience of Fiscal Reform: Lessons for Portugal," Working Papers 2014:27, Lund University, Department of Economics.
    3. Jonung, Lars, 2014. "Reforming the Fiscal Framework. The Case of Sweden 1973-2013," Working Papers 2014:26, Lund University, Department of Economics.
    4. Torben M. Andersen, 2013. "The Swedish Fiscal Policy Framework and Intermediate Fiscal Policy Targets," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 149(II), pages 231-248, June.

    More about this item

    Keywords

    Macroeconomic crisis; Banking crisis; Fiscal consolidation; Structural reforms; Fiscal rules;

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • G01 - Financial Economics - - General - - - Financial Crises

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