Lars Calmfors, 28 September 2020

High employment is an important objective for all governments. This column makes the case for numerical employment targets, arguing that such targets can help balance fiscal objectives while also strengthening the incentives for reforms that raise structural employment. For the case of Sweden, the author recommends two targets: the actual employment rate for 20–68-year olds, and the actual annual hours worked per person in the population.

Steffen Juranek, Jörg Paetzold, Hannes Winner, Floris Zoutman, 12 September 2020

Sweden attracted international attention for not imposing a strict lockdown after the outbreak of COVID-19. This column analyses the labour market effects of this strategy by comparing unemployment and furlough spells in Sweden to three of its Nordic neighbours. The evidence suggests that the labour markets of all countries were severely hit by the pandemic, but Sweden performed slightly better than its neighbours. 

Hanna Armelius, Carl Andreas Claussen, André Reslow, 12 September 2020

While the ratio of physical cash to GDP has increased in most countries over the last years, it has fallen dramatically in Sweden. This column argues that rather than being ahead of the curve, a unique combination of events and policy measures have led to the falling cash demand in Sweden. Among those are measures to reduce tax evasion and the informal sector, an aggressive notes changeover, the introduction of an electronic payment app, the withdrawal of central bank subsidies to cash distribution, and a track record of protecting commercial bank money during crises.

Lars Calmfors, 08 September 2020

Assar Lindbeck, who died on 28 August, aged 90, was for decades Sweden's leading economist. As a research entrepreneur, he developed the Institute for International Economic Studies (IIES) at Stockholm University to an internationally prominent research institution, he was instrumental in creating the Nobel Prize in economics, and he reformed and internationalised the country’s economics PhD teaching. His own research spanned monetary and fiscal policy, the welfare state, the importance of social norms and the labour market – and he also played a key role in both Swedish and international public debates on these issues. He always emphasised that economists should both do research at the international frontier and participate actively in the policy debate – and that these two activities should cross-fertilise one another.

Benjamin Born, Alexander Dietrich, Gernot Müller, 31 July 2020

Sweden stands out from its European peers as the only country that did not impose a lockdown in response to the COVID-19 outbreak. This column uses this peer group to construct a synthetic control unit to approximate a counterfactual lockdown scenario for Sweden lasting from March 18 to May 17. The results suggest the lockdown would have reduced the number of COVID-19 infections by a half and deaths by a third.

Isaiah Hull, 23 July 2020

The COVID-19 pandemic has placed pressure on central banks and other public institutions to monitor the economy at a higher frequency than usual. However, much of the data and expertise needed to perform such monitoring is concentrated in the private sector and academia. This column describes the effort made by the Swedish Riksbank to alleviate this bottleneck by opening up a collaborative public channel through which academics and the private sector can directly contribute to the research in real time.

Lars Jonung, 18 June 2020

The Swedish policy response to Covid-19 is exceptional by international comparison. This column explains how the approach is decided by three articles in the Swedish constitution. The first guarantees the freedom of movement for Swedish citizens, ruling out nationwide lockdowns. The second establishes unique independence for public agencies, allowing them to design the policy response to the pandemic. The third grants exceptional powers to local government. In addition, the Swedish approach is fostered by strong trust in the government.

Annie Tubadji, Don Webber, Frederic Boy, 10 June 2020

The general public’s mental health can be affected by different public policy responses to a pandemic threat. Italy, the UK and Sweden implemented distinct approaches to the COVID-19 pandemic: early lockdown, delayed lockdown, and no lockdown. This column presents a novel culture-based Development approach using narrative economics of language and Google trend data. It is evident that countries had a pre-existing culturally relative dispositions towards death-related anxiety and their sensitivity to COVID-19 public policy was country-specific. Further, one country’s lockdown policy can affect another country’s mental health, suggesting that policymakers should account for this spillover effect.

Johanna Rickne, Olle Folke, 21 May 2020

The #MeToo movement put a spotlight on a severe and highly prevalent workplace problem: sexual harassment. Using data from Sweden, this column argues that economists should treat sexual harassment as gender discrimination in work conditions. Both men and women are subject to this discrimination when they are part of gender minorities in occupations or workplaces.

Dirk Krueger, 14 May 2020

Do we close our public spaces to protect our communities from Covid-19, or keep them open, as in Sweden? Dirk Krueger tells Tim Phillips that informing the public and then trusting individuals to make good choices might deliver a decline in infections, while minimising the Covid recession.

Download Covid Economics 5, including Dirk's paper.
Picture: Creative Commons/Vogler

William Maloney, Temel Taskin, 15 May 2020

Social distancing is critical to reducing the propagation of COVID-19. This column argues that in developed countries, mandatory policies matter less than voluntary demobilisation in reducing mobility and enabling social distancing.  An analysis using Google mobility data reveals significant declines in restaurant reservations in the US and movie theatre revenues in Sweden before the imposition of government non-pharmaceutical interventions. While this behaviour will help reduce mobility and the spread of the virus, it may also slow the economic recovery that follows. 

Fredrik N G Andersson, Lars Jonung, 08 May 2020

Negative interest rates were once seen as impossible outside the realm of economic theory. However, recently several central banks have imposed such rates, with prominent economists supporting this move. This column investigates the actual effects of negative interest rates, taking evidence from the Swedish experience during 2015-2019. It is evident that the policy’s effect on the inflation rate was modest, and that it contributed to increased financial vulnerabilities. The lesson from the experiment is clear: Do not do it again.

Nils Karlson, Charlotta Stern, Daniel Klein, 20 April 2020

Sweden has largely bucked the lockdown trend, leaving much to the discretion of individual citizens. This column offers an account of some of the institutional and cultural underpinnings of Sweden’s COVID regime, and attempts to explain why the country has opted for a relatively permissive approach.

Anne Boschini, Jesper Roine, 29 January 2020

While the rising income share of top earners has received enormous attention in recent years, the share of women at the top has not been examined as closely. This column analyses income tax data from Sweden, where taxes are filed individually regardless of marital status. It finds that while the share of women among the wealthiest groups has steadily increased over time, women remain a clear minority, especially at the very top. Unlike top-income men, top-income women are much more likely to have partners who are also in the top of the income distribution.

Natasha Agarwal, Magnus Lodefalk, Majken Stenberg, Aili Tang, Sofia Tano, Zheng Wang, 11 December 2019

Export credit guarantees turned 100 this year, yet they have been sparsely studied. This column examines the causal effects of export credit guarantees on firm performance. It concludes by considering whether the provision of guarantees should be rebalanced in favour of small and medium-sized enterprises and by calling for governments to urgently integrate all major countries into a regulated system for export credit guarantees.

Eric Golson, 11 November 2019

Neutrality has long been viewed as impartiality in war. This column, part of the Vox debate on World War II, asserts that neutral states in the war were realist in approaching their defence to ensure their survival. Neutrals such as Portugal, Spain, Sweden, and Switzerland maintained independence by offering economic concessions to the belligerents to make up for their relative military weakness. Economic concessions took the form of merchandise trade, services, labour, and capital flows. Depending on their position and the changing fortunes of war, neutral countries could also extract concessions from the belligerents, if their situation permitted.

Jakob Molinder, Tobias Karlsson, Kerstin Enflo, 23 October 2019

History has shown that new technology can disrupt societies, and current developments in automation have raised anxious speculation on what might happen if stable middle-class jobs are taken over by machines. This column analyses the impact of technological change on labour markets and social protests, taking the case of the adoption of electricity in early 20th century Sweden. It finds that electrification did increase the incidence of local strikes, but that disputes were associated with workers demanding higher wages and better working conditions rather than attempting to block innovation.

Fredrik Heyman, Pehr-Johan Norbäck, Lars Persson, 12 August 2019

Recent studies document a 30-year decline in various measures of dynamism in the US, manifested in a decline in the share of young firms as well as their share of job creation. This column shows that this has not been the case in Sweden. Young firms have been more prominent in the Swedish business sector than in the US in recent decades, and policies to encourage entrepreneurship are key to this.

Richard Friberg, Frode Steen, Simen Ulsaker, 02 July 2019

Consumers often travel to neighbouring countries to shop at cheaper prices. This column uses sales data from a Norwegian grocery chain to examine how cross-border shopping into Sweden responds to changes in relative prices. It shows that the response to price changes is highest at some distance from the border, where consumers respond by reconsidering whether or not to travel abroad for their shopping.

Pages

Events

CEPR Policy Research