Luckily Sweden has no shortage of fiscal space.
The only problem, as with other Northern European countries, is that Sweden doesn't seem to want to use that space even in a downturn.
(even when interest rates are negative and the scope for effective monetary policy is limited)
The only problem, as with other Northern European countries, is that Sweden doesn't seem to want to use that space even in a downturn.
(even when interest rates are negative and the scope for effective monetary policy is limited)
https://twitter.com/AntonioFatas/status/1184752126846590976
Bloomberg recently: "Sweden’s Social Democrat-led government is sticking to a surplus regime even as the labor market is showing signs of a rapid deterioration and economic growth has stalled."
bloomberg.com/news/articles/…
bloomberg.com/news/articles/…
Larry Summers recently wrote: "Governments that run chronic surpluses are failing to do their part to support the global economy and should be the object of international scrutiny."
That applies to Germany obviously. But also Sweden, the Netherlands, Switzerland and Korea.
That applies to Germany obviously. But also Sweden, the Netherlands, Switzerland and Korea.
Absent a policy shift in Germany and Sweden both could well have a recession (or something very close to it -- output growth has stalled in Germany, Swedish unemployment is rising) without going into fiscal deficit ...
that's structurally too tight a policy
that's structurally too tight a policy
• • •
Missing some Tweet in this thread? You can try to
force a refresh
