THE ORIGINS OF THE RECENT SWEDISH CRISIS: A LESSON FOR THE EUROPEAN LEFT

Abstract

Poses the question: “What has gone wrong?” in a country which was envied for its full employment and high standard of living and which now has rising unemployment and recently has suffered a major currency crisis. Pinpoints the beginning of problems back in 1985 when Sweden began to deregulate its financial markets, which ultimately plunged the economy into recession. Details further financial blunders which compounded the problem. By 1991 a tight budgetary policy had reduced inflation but at the cost of destroying one‐fifth of all industrial jobs and a four‐fold rise in unemployment. Assesses the content of three rescue packages put together by the coalition Government and the Social Democratic Party (SAP). All the proposals cut into citizens′ welfare benefits and undermine their living standards. Views these proposals as courting disaster and makes suggestions for alternative approaches to the problem, based on Keynesian theory.

Citation

Burkitt, B. and Whyman, P. (1993), "THE ORIGINS OF THE RECENT SWEDISH CRISIS: A LESSON FOR THE EUROPEAN LEFT", European Business Review, Vol. 93 No. 4. https://doi.org/10.1108/EUM0000000001920