Sweden: ‘The rock star of the recovery’
Almost every developed nation in the world was walloped by the financial crisis, their economies paralyzed, their prospects for the future muddied.
- And then there’s Sweden, the rock star of the recovery.
The Washington Post wrote that Sweden has accomplished what the United States, Britain and Japan can only dream of: Growing rapidly, creating jobs and gaining a competitive edge.
Sweden was far from immune to the global downturn of 2008-09. But unlike other countries, it is bouncing back. Its 5.5 percent growth rate last year trounces the 2.8 percent expansion in the United States and was stronger than any other developed nation in Europe. And compared with the United States, unemployment peaked lower (around 9 percent, compared with 10 percent) and has come down faster (it now stands near 7 percent, compared with 9 percent in the U.S.).
Sweden’s five lessons for a crisis-stricken nation:
1. Keep your fiscal house in order when times are good, so you will have more room to maneuver when things are bad.
2. Fiscal stimulus can be more effective when it is automatic.
3. Use monetary policy aggressively
4. Keep the value of your currency flexible.
5. Bankers will always make blunders; just make sure they don’t doom the economy.
The full article was published by the Washington Post on June 24th.