The plunge in Sweden's economy has taken many by surprise. Using modern theories of macroeconomics and economic policy to analyze Sweden's serious economic situation, this text outlines recommendations for change.

The authors identify the deficiencies of Sweden's economic and political institutions, and suggest remedies that cut across virtually all aspects of economic and political life: product and factor markets, the system of wage formation, the public sector, and central and local government. They show that many of the current problems stem from an unclear division of responsibilities, describing a government that has taken on so many tasks that it is unable to fulfill its core obligations. Three chapters tackle the basic problems in the Swedish economy, namely stability, efficiency and growth - while a fourth chapter suggests how to change the political system to strengthen democracy.

The Swedish crisis
stability
efficiency
growth
democracy
recovery.