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The Stockholm School in a New Age – Erik Lundberg and the Swedish Model

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  • Erixon, Lennart

    () (Dept. of Economics, Stockholm University)

Abstract

The Stockholm-school member Erik Lundberg is the economist who devoted most attention to the economic theory and policy of the Swedish postwar model. The established view is that Lundberg was a steadfast opponent of the so-called Rehn- Meidner model, an economic and wage policy program developed by two Swedish trade-union economists in the early postwar years. The model recommends fiscal policies in the medium term, extensive labor market programs and wage policies of solidarity to simultaneously obtain price stability, full employment, income equality and high growth. This article maintains that Lundberg shared many of the premises of the Rehn-Meidner model already at the beginning of his debate with Gösta Rehn in the early 1950s. Furthermore, in their debate, Lundberg approached Rehn’s policy program and underlying theory of the working of the Swedish economy. Despite his ideological qualms, Lundberg’s ambiguous attitude to the Rehn-Meidner model turned into a complete adoption of the model in the 1960s. By highlighting the innovative nature of the Rehn-Meidner theory, Lundberg also correctly downplayed the impact of the Stockholm School.

Suggested Citation

  • Erixon, Lennart, 2018. "The Stockholm School in a New Age – Erik Lundberg and the Swedish Model," Research Papers in Economics 2018:4, Stockholm University, Department of Economics.
  • Handle: RePEc:hhs:sunrpe:2018_0004
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    References listed on IDEAS

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    1. Hibbs, Douglas A, Jr & Locking, Hakan, 2000. "Wage Dispersion and Productive Efficiency: Evidence for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 755-782, October.
    2. Lennart Erixon, 2011. "A social innovation or a product of its time? The Rehn-Meidner model's relation to contemporary economics and the Stockholm school," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 18(1), pages 85-123.
    3. Daron Acemoglu, 2010. "When Does Labor Scarcity Encourage Innovation?," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1037-1078.
    4. Lennart Erixon, 2010. "The Rehn-Meidner Model in Sweden: Its Rise, Challenges and Survival," Journal of Economic Issues, Taylor & Francis Journals, vol. 44(3), pages 677-715.
    5. Lundberg, Erik, 1985. "The Rise and Fall of the Swedish Model," Journal of Economic Literature, American Economic Association, vol. 23(1), pages 1-36, March.
    6. Lundberg, Erik, 1972. "Productivity and Structural Change-A Policy Issue in Sweden," Economic Journal, Royal Economic Society, vol. 82(325), pages 465-485, Supplemen.
    7. Lennart Erixon, 2018. "Progressive supply-side economics: an explanation and update of the Rehn-Meidner model [Good jobs versus bad jobs]," Cambridge Journal of Economics, Oxford University Press, vol. 42(3), pages 653-697.
    8. Hans-Michael Trautwein, 2011. "From Austrian Economics To The Swedish Welfare State: Wicksellian Views On Money And Income Distribution," Cahiers d’économie politique / Papers in Political Economy, L'Harmattan, issue 61, pages 51-90.
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    More about this item

    Keywords

    Swedish model; Rehn-Meidner model; Stockholm School; Economic policy; Wage policy of solidarity; Labor-market policy;

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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