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Still, your point is relevant, in that the Euro would never have worked unless there were strict budget discipline and large budget surpluses during the good times, as the interest rate weapon would work much less efficiently during the bad times, and fiscal stimulus becomes very problematic in a common currency area unless your government debt is initially very low. Maybe the cap should have been set not at 60% of GDP, but at 30%? Then we would have no EZ at the moment, as Germany would not have managed to reach 30% yet. Seems like a good outcome to me... No caps on deficits, hard caps on debt ratios which were to be waived in the event of local asymmetric shocks.. Peak oil is not an energy crisis. It is a liquid fuel crisis.
But from what I now understand he could have told "you and what central bank?" and got them to stop smirking. If there was a law in place to stop direct borrowing form Riksbanken they could always used Nordea that the government had taken over and borrowed as much as they wanted. Thus turning the speculators to... raw meatballs? Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
When it comes to the 70ies and 80ies I think the standard explanation overlooks factors like oil dependence, RoW catching up (Sweden did not have its industrial base destroyed in wwII) and demographics - Sweden avoiding wwII meant more people born in 10's and 20ies working in the 50ies and 60ies and retiring in the 70ies and 80ies. I also object to stagnation causing the property bubble of the late 80ies, I see that as caused by the deregulation of 1985:
Novemberrevolutionen (Sverige) - Wikipedia
Novemberrevolutionen är det informella namnet på Riksbankens beslut att avreglera den svenska kreditmarknaden den 21 november 1985.[1] Beslutet innebar bland annat att bankerna fick låna ut obegränsat med pengar utan att Sveriges riksbank lade hinder i vägen. Nationalekonomen Lars Jonung har skrivit om novemberrevolutionen: "Detta är den s.k novemberrevolutionen som markerar den mest genomgripande omläggningen av Riksbankens penningpolitiska strategi under hela efterkrigstiden.".[2]
Novemberrevolutionen är det informella namnet på Riksbankens beslut att avreglera den svenska kreditmarknaden den 21 november 1985.[1] Beslutet innebar bland annat att bankerna fick låna ut obegränsat med pengar utan att Sveriges riksbank lade hinder i vägen.
Nationalekonomen Lars Jonung har skrivit om novemberrevolutionen: "Detta är den s.k novemberrevolutionen som markerar den mest genomgripande omläggningen av Riksbankens penningpolitiska strategi under hela efterkrigstiden.".[2]
But we are getting into a very broad topic and of the imho interesting topic in relation to the ongoing euro crisis - did Persson need to borrow abroad and if so why? Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
Have to be very careful when making conclusions based on Economic History. It's easy, with the best will in the world, to fall into "Correlation-as-Causation" fallacies. She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
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