Swedish countercyclical policy combined supply and demand measures with business price-stability guarantees

Evidence

Taken together, these initiatives facilitated an expansionary policy that worked through the supply side of the economy as well as the demand side, while taking the price-stability concerns of business seriously. As Swedish economist Rudolph Meidner said of economic policy in this period, the objective was to “maintain the market economy, to counter short-sighted fluctuations through anti-cyclical policies, and to neutralize its negative effects through fiscal policies. The rallying cry was full employment, economic growth, [a] fair division of national income, and social security.” — Mark Blyth, Austerity, 523