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The Nordic model of economic development: shocks, reforms and future prospects


  • Iacono, Roberto


The aim of this research is to provide novel evidence regarding the functioning of the Nordic model of economic development and the robustness of its institutions. At first, the paper defines a conceptual analytical framework identifying the key features of the model for the Nordic economies (Denmark, Finland, Norway, and Sweden), by synthesizing relevant background literature. Secondly, this framework is used to interpret a set of shocks, reforms and ongoing trends: the effect of resource revenues on the labor market and income inequality in Norway compared to the other Nordic countries; the design of a novel minimum income scheme in Finland and its effects on preferences for social insurance; and the implications of population ageing and increased automation for indicators of sustainability for the Nordic welfare states.

Suggested Citation

  • Iacono, Roberto, 2017. "The Nordic model of economic development: shocks, reforms and future prospects," GLO Discussion Paper Series 112, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:112

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    References listed on IDEAS

    1. Daron Acemoglu & Pascual Restrepo, 2017. "Secular Stagnation? The Effect of Aging on Economic Growth in the Age of Automation," American Economic Review, American Economic Association, vol. 107(5), pages 174-179, May.
    2. Erling Barth & Karl Ove Moene, 2016. "The Equality Multiplier: How Wage Compression And Welfare Empowerment Interact," Journal of the European Economic Association, European Economic Association, vol. 14(5), pages 1011-1037, October.
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    Cited by:

    1. Iacono Roberto & Palagi Elisa, 2022. "Still the Lands of Equality? Heterogeneity of Income Composition in the Nordics, 1975–2016," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 22(2), pages 221-268, April.
    2. Gianluca Grimalda & Alain Trannoy & Fernando Filgueira & Karl Ove Moene, 2020. "Egalitarian redistribution in the era of hyper-globalization," Review of Social Economy, Taylor & Francis Journals, vol. 78(2), pages 151-184, April.

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    More about this item


    Nordic model; Income inequality; Welfare states; Ageing; Automation;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • P47 - Economic Systems - - Other Economic Systems - - - Performance and Prospects
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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