The Swedish unemployment experience

Abstract

By international standards, unemployment in Sweden remained remarkably low throughout the 1970s and the 1980s. In the early 1990s, however, the unemployment rate increased sharply and hit double-digit levels. The paper argues that the steep rise in unemployment was mainly the result of a series of adverse macroeconomic shocks, partly self-inflicted by bad policies and partly caused by unfavourable international developments. The extremely contractionary monetary policy in 1992 appears to have had strong and lo…