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Walter Korpi argues in a previous issue of Challenge (March/April 2000) that Swedish economists' claim that Sweden's growth performance has been inferior to that of other industrialized countries is at odds with the facts. Since Sweden has not grown slowly relative to other countries, there is no basis for the claim that "the Swedish model", characterized by a large public sector and comprehensive redistributive policies, could be growth impeding. Moreover, Korpi maintains that the discussion reveals a lack of objectivity among Swedish academic economists. In this article Magnus Henrekson argues that Korpi is wrong regarding Sweden's relative growth performance. Available data indicate that Sweden was lagging behind during the 1970s and 80s, and this tendency is further strengthened when the time period is extended. Then it is clear that the lagging behind began in the mid 1960s and continued through the mid 1990s. As a corollary, examining the factors behind Sweden's slow growth must be considered an important research issue. Finally, Henrekson maintains that the available evidence, if anything, demonstrates that Walter Korpi is the one who has been lacking in scholarly objectivity.-(/ Classification: O1, O47 and O50.
2000
Walter Korpi argues in a previous issue of Challenge (March/April 2000) that Swedish economists' claim that Sweden's growth performance has been inferior to that of other industrialized countries is at odds with the facts. Since Sweden has not grown slowly relative to other countries, there is no basis for the claim that "the Swedish model", characterized by a large public sector and comprehensive redistributive policies, could be growth impeding. Moreover, Korpi maintains that the discussion reveals a lack of objectivity among Swedish academic economists. In this article Magnus Henrekson argues that Korpi is wrong regarding Sweden's relative growth performance. Available data indicate that Sweden was lagging behind during the 1970s and 80s, and this tendency is further strengthened when the time period is extended. Then it is clear that the lagging behind began in the mid 1960s and continued through the mid 1990s. As a corollary, examining the factors behind Sweden's slow growth must be considered an important research issue. Finally, Henrekson maintains that the available evidence, if anything, demonstrates that Walter Korpi is the one who has been lacking in scholarly objectivity.
Sse Efi Working Paper Series in Economics and Finance, 2000
Walter Korpi argues in a previous issue of Challenge (March/April 2000) that Swedish economists' claim that Sweden's growth performance has been inferior to that of other industrialized countries is at odds with the facts. Since Sweden has not grown slowly relative to other countries, there is no basis for the claim that "the Swedish model", characterized by a large public sector and comprehensive redistributive policies, could be growth impeding. Moreover, Korpi maintains that the discussion reveals a lack of objectivity among Swedish academic economists. In this article Magnus Henrekson argues that Korpi is wrong regarding Sweden's relative growth performance. Available data indicate that Sweden was lagging behind during the 1970s and 80s, and this tendency is further strengthened when the time period is extended. Then it is clear that the lagging behind began in the mid 1960s and continued through the mid 1990s. As a corollary, examining the factors behind Sweden's slow growth must be considered an important research issue. Finally, Henrekson maintains that the available evidence, if anything, demonstrates that Walter Korpi is the one who has been lacking in scholarly objectivity.
The Economic Journal, 1996
CIRCLE Electronic Working Papers, 2008
The aim of this paper is to examine whether the previously observed gap between growth of R&D and economic performance, known as the 'Swedish paradox', is a general phenomenon across all sectors of the economy, or only occurs in specific industry segments. The dataset used for the analysis covers nearly the entire Swedish economy 1985-1998, divided into five broad sectors:
2006
IN HIS RESPONSE TO MY COMMENT (BERGH 2006), LINDERT insinuates repeatedly that my criticisms of his book are little more than ideological bias. In this response, I will try even harder to recur to the facts. Still my conclusion is that Lindert is wrong about work incentives and employment in Sweden. To explain the so called free-lunch puzzle, we probably need to look closer at institutional quality and economic freedom. I comment on Lindert's remarks in order of their appearance.
New Political Economy, 2013
This paper discusses a number of questions with regard to Sweden's economic and political development: • How did Sweden become rich? • What explains Sweden's high level of income equality? • What were the causes of Sweden's problems from 1970 to 1995? • How is it possible that Sweden, since the crisis of the early 1990s, is growing faster than most EU countries despite its high taxes and generous welfare state? These questions are analyzed using recent insights from institutional economics, as well as studies of inequality and economic growth. The main conclusion is that there is little, if any, Swedish exceptionalism: Sweden became rich because of well-functioning capitalist institutions, and inequality was low before the expansion of the welfare state. The recent favorable growth record of Sweden, including the period of financial stress (2008-2010), is a likely outcome of a number of far-reaching structural reforms implemented in the 1980s and 90s.
2006
Following a severe contraction in the early 1990s, the Swedish economy accumulated a strong record of output growth coupled with a disappointing performance in the labor market. As of 2005, hours worked per person 20-64 years of age are 10.5 percent below the 1990 peak and a mere one percent above the 1993 trough. Employment rates tell a similar story. Our explanation for Sweden's weak performance with respect to market work activity highlights the role of high tax rates on labor income and consumption expenditures, wage-setting arrangements that compress relative wages, business tax policies that disfavor labor-intensive industries and technologies, and a variety of policies and institutional arrangements that disadvantage younger and smaller businesses. This last category includes tax policies that penalize wealth accumulation in the form of owneroperated businesses, a pension system that steers equity capital and loanable funds to large incumbent corporations, and legally mandated job-security provisions that weigh more heavily on smaller and younger businesses. We describe these features of the Swedish institutional setup and provide evidence of their consequences based largely on international comparisons. JEL Classification: L52; J20; H30; D13; O52.
In this paper an analytical framework is developed where the poorly understood question of the long-term relationship between equality and growth is addressed. The authors go on to demonstrate the interconnectedness of egalitarianism and growth through the process of structural change in the case of Sweden during the last two centuries with emphasis on the drive to Modern Economic Growth. The authors argue that while the successful Swedish development obviously is unique and conditioned by specific historical circumstances, valuable lessons could nevertheless be drawn for current LDCs. The Swedish case demonstrates that the agricultural transformation, spurred by the enclosure movement, paved the way for surplus production and commercialisation through the inclusion of the peasantry. This inclusion together with subsequent institutional arrangements sustained egalitarianism and became fundamental elements in the rise of the Swedish industrial market economy. During the first half of...
RePEc: Research Papers in Economics, 1996
Swedes, out of a population of around four million at that time, emigrated, mainly to North America, in search of a better life. Today, Sweden is one of the richest countries in the world. In terms of human development, UNDP's Human Development Index (HDI) gave Sweden a respectable fourth place in the 1991 Human Development Report (HDR). In the gender-disparity-adjusted HDI of the HDR of 1992, Sweden improved its rank to number one in the world. The main purpose of this country study is to summarise the major reasons for this spectacular and sustained success in economic and social development, and to discuss, as a background paper for the 1996 Human development Report, the inter-linkages between macroeconomic development, political and institutional development and human development. Since the early process of industrialisation and modernisation may be of some general relevance, the historical part is given considerable attention.
2014
"In this article we analyse the relation between the dynamics of economic growth and the welfare state using the Swedish experience as a case study. We defend three theses concerning the Swedish experience: that the deep economic crisis of 1990–93 constituted the definite breaking point for the accumulation pattern in force since the 1950s (and in crisis since the mid-1970s); that the new accumulation pattern eroded the long-standing symbiotic relationships between economic growth and the welfare state; and that the welfare state has suffered retrenchments and qualitative changes of great importance, which can be fundamentally explained by the transformations in the accumulation pattern. We conclude that the changes introduced in Sweden have continued to subordinate the welfare state’s main goals, giving priority to the new accumulation pattern. doi: 10.1093/cje/bet049
2014
In this paper an analytical framework is developed where the poorly understood question of the long-term relationship between equality and growth is addressed. The authors go on to demonstrate the interconnectedness of egalitarianism and growth through the process of structural change in the case of Sweden during the last two centuries with emphasis on the drive to Modern Economic Growth. The authors argue that while the successful Swedish development obviously is unique and conditioned by specific historical circumstances, valuable lessons could nevertheless be drawn for current LDCs. The Swedish case demonstrates that the agricultural transformation, spurred by the enclosure movement, paved the way for surplus production and commercialisation through the inclusion of the peasantry. This inclusion together with subsequent institutional arrangements sustained egalitarianism and became fundamental elements in the rise of the Swedish industrial market economy. During the first half of...
Journal of Modern European History, 2011
2008
Abstract. The contribution of this paper is twofold. First, it builds and makes use of long-run data from Sweden on formal education that have never been used to date. Second, it provides a quantitative application of recent theoretical work on the link between demographic changes and economic growth through their effect on education.
Johansson, I, 2006
The Swedish paradox is mainly related to high R&D performance and supposedly low aggregate economic performance. Advocates of the Swedish paradox have not spelled out their theoretical assumptions in any detail. We show that the theoretical and empirical foundations for talking about a paradox in a strict sense are weak. In a more casual sense there may still be reason to talk of a paradox and we therefore decompose Swedish growth-problems into two competing, but also partially overlapping, sets of hypotheses. The first is related to business, and form entrepreneurial-innovation explanations, the second is related to public knowledge, and is mainly related to the organization of public knowledge production. The former set of hypotheses can more easily be investigated in data: we find that Sweden shows increasing, but still below OECD average, shares of exports in high-tech and medium-high-tech. For employment in these areas, Sweden's position is actually quite impressive. However, Sweden shows poor entrepreneurial performance with few start-ups. The role of public knowledge remains an under-researched area, although earlier evidence seems to point towards lacking business-interaction in the sense that few businesses with academic origin are being started. Thus there is an overlap with the first set of hypotheses.
Journal of evolutionary economics, 2005
In a study of European growth in the interwar period, the Swedish economist Ingvar Svennilson integrated a Keynesian theory of cumulative growth with a Schumpeterian analysis of economic transformation. Svennilson emphasised that innovations and the use of new technologies had been stimulated by high demand and production growth. Svennilson's strong commitment to "Verdoorn's Law", which actually was "Svennilson's Law", made it difficult to incorporate him in a Schumpeterian tradition. A synthesis between Keynes and Schumpeter with Svennilson as a mediator was also prevented by the decisive role of entrepreneurship and the critique of Keynesian models in works by Schumpeter and the Swedish growth school. However, a synthesis has been facilitated by neo-Schumpeterian theories of demand-led innovations and cumulative economic processes. Svennilson's study has been superseded by later contributions to economics except for a theory of a negative, "Keynesian", relationship between unemployment and growth and an exceptional "un-Verdoornian" theory that high aggregate demand may lead to crowding-out of new firms from capital markets. Besides, Svennilson's integration of short run and long run macro analysis and of theoretical and empirical work is still a fruitful research strategy in economics.
Econ Journal Watch, 2006
Sturm have written a valuable survey of the literature that uses the Gwartney and Lawson economic freedom (EFW) index. Their discussion of the index's theoretical underpinnings and methodological ins and outs itself should be useful to scholars interested in the field. Also their survey of the empirical economic freedom-economic growth literature is a useful contribution.
2007
This chapter looks in detail at the macroeconomic performance of Denmark, Finland and Sweden. Finland and Sweden have achieved high output growth but less satisfactory employment growth. Denmark has been less successful in terms of output growth, but labour market performance has been impressive. The question is whether the Scandinavian economic model represents a role model for the rest of
International Labour Review, 2006
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