{
  "title": "Eurosclerosis or Financial Collapse: Why Did Swedish Incomes Fall Behind?",
  "publication": "IMF Working Papers, February 1, 2005",
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  "summary": "Sweden represents an archetypal welfare state economy, with extensive government safety nets. Some scholars have attributed a decline in its per capita income ranking since 1970 to \"eurosclerosis\" or sluggish growth caused by distortionary policies.",
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      "heading": "Main findings",
      "content": "- Sweden is presented as an archetypal welfare state economy, with extensive government safety nets.\n- Some scholars have attributed a decline in Sweden's per capita income ranking since 1970 to \"eurosclerosis\"—sluggish growth caused by distortionary policies.\n- This paper argues that the permanent loss in output following Sweden's banking crisis in the early 1990s explains the decline in its per capita GDP ratings.\n- The paper finds no macroeconomic evidence that welfare state policies have deterred growth.\n- The results warn that empirical growth analyses should distinguish between trend output growth and permanent output loss associated, for example, with financial crises."
    },
    {
      "heading": "Evidence and analytical emphasis",
      "content": "- Emphasis on separating trend output growth from permanent output loss when analyzing growth determinants.\n- Identification of Sweden's early 1990s banking crisis as the explanatory factor for the long-run per capita income decline rather than welfare-state distortionary effects."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Empirical growth analyses and policy evaluations should explicitly account for permanent output losses caused by financial crises to avoid misattributing long-run income declines to structural policy features.\n- Policymakers and researchers should be cautious in linking welfare state policies to long-run growth without first controlling for the legacy effects of financial collapses.\n\n---\n\n Content in this bundle\n\n- wp0529\n  - wp0529 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0529 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/eurosclerosis-or-financial-collapse-why-did-swedish-incomes-fall-behind-17960"
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    "Authors: Valerie Cerra, Sweta Chaman Saxena",
    "Published: February 1, 2005",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451860481.001",
    "Sweden is presented as an archetypal welfare state economy, with extensive government safety nets.",
    "Some scholars have attributed a decline in Sweden's per capita income ranking since 1970 to \"eurosclerosis\"—sluggish growth caused by distortionary policies.",
    "This paper argues that the permanent loss in output following Sweden's banking crisis in the early 1990s explains the decline in its per capita GDP ratings.",
    "The paper finds no macroeconomic evidence that welfare state policies have deterred growth.",
    "The results warn that empirical growth analyses should distinguish between trend output growth and permanent output loss associated, for example, with financial crises.",
    "Emphasis on separating trend output growth from permanent output loss when analyzing growth determinants.",
    "Identification of Sweden's early 1990s banking crisis as the explanatory factor for the long-run per capita income decline rather than welfare-state distortionary effects.",
    "Empirical growth analyses and policy evaluations should explicitly account for permanent output losses caused by financial crises to avoid misattributing long-run income declines to structural policy features.",
    "Policymakers and researchers should be cautious in linking welfare state policies to long-run growth without first controlling for the legacy effects of financial collapses.",
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