OECD Economic Surveys: Sweden 2000-2001 (O E C D Economic Surveys Sweden)

Table of contents......Page 5 Assessment and recommendations......Page 10 Overview......Page 24 Figure 1. Macroeconomic performance......Page 25 Buoyant private consumption......Page 27 Figure 2. The forces shaping private consumption......Page 28 Private investment and financial savings......Page 29 Figure 3. Business and housing investment and private financial savings......Page 30 Public-sector consumption and investments......Page 31 Figure 4. Real public-sector consumption, investment and employment......Page 32 Foreign trade and current account developments......Page 33 Figure 5. Export market performance and import penetration......Page 34 Table 2. Various measures of inflation, 1997-2000......Page 35 Figure 6. Inflation and inflation expectations......Page 37 Box 1. Inflation measures frequently used in Sweden......Page 38 Table 4. Costs, prices and profitability in the business sector......Page 39 Figure 7. Profit share in the business sector in Sweden and the euro area......Page 40 Table 5. Hourly earnings and labour costs, 1997-2000......Page 41 Figure 8. Nominal and real wage increases......Page 42 Output and productivity at the aggregate and industry levels......Page 43 Figure 9. Actual and potential output......Page 44 Employment and unemployment......Page 45 Box 2. Survey indicators of labour shortages across industries......Page 46 Figure 10. Indicators of labour shortages......Page 47 Figure 11. Labour market developments......Page 49 Has the growth-inflation trade off improved in recent years?......Page 48 The outlook to 2002......Page 50 Table 7. Outlook for2001 and2002......Page 51 The framework for monetary policy......Page 53 Figure 12. Selected inflation forecasts by the Riksbank, 1999-2000......Page 55 Figure 13. Short-term interest rates and exchange rate developments......Page 57 Figure 14. Capital flows......Page 59 Long-term interest rates and mortgage financing......Page 58 Figure 15. Long-term interest rates......Page 60 Table 8. Mortgage institutions’ lending to households, 1996-2000......Page 61 Financial stability and credit developments......Page 62 Figure 16. Lending, money growth and financial stability......Page 63 Fiscal policy......Page 64 The achievements of the consolidation process briefly revisited......Page 65 Figure 17. The fiscal balance and the public debt......Page 66 Latitude for reform?......Page 67 Table 10. Discretionary fiscal policy measures in the budgets for 2000 and 2001......Page 69 Figure 19. The budget balance and household saving rate......Page 71 Expenditure ceilings......Page 73 Figure 20. Demarcation of ceiling-restricted expenditure, 2000......Page 74 Table 12. Absolute mean forecast errors in the spring budgets, 1988-98......Page 75 Table 13. Expenditure ceilings: experiences in1997-99 and expectations for2000-03......Page 76 Assessment of the current policy mix......Page 77 Long-term decline and recent recovery in economic performance......Page 80 Figure 21. Long-run economic growth performance......Page 81 Figure 22. The evolution of employment and investment......Page 82 Figure 23. Multi-factor productivity growth......Page 83 Table 15. Nascent entrepreneurs in different countries......Page 85 Progress with reducing structural unemployment......Page 86 Figure 24. Actual and structural unemployment......Page 87 Figure 25. Structural settings of Swedish labour-market policies......Page 88 Box 5. Activity guarantee......Page 89 Supplementary benefits for part-time workers sustain unemployment......Page 90 Figure 26. Employment and unemployment for part-time workers......Page 91 Active labour market policies......Page 92 Table 16. Participants in labour-market programmes and adult education......Page 93 Employment and participation rates remain well below earlier peak levels......Page 94 Figure 27. Contributions to the labour force, 1970-2020......Page 96 Table 17. Changes in participation rates from1990 to2000......Page 97 Figure 28. Employment and participation rates......Page 98 Working-time policies......Page 99 Box 7. Implications of reduced working hours on the public finances......Page 101 Table 19. Transfer recipients aged 16-64 years......Page 102 Tax policies......Page 104 Table 20. Average marginal effective tax rates, 1991 and 2000......Page 105 Competition and product markets......Page 107 Electricity......Page 108 Table 22. Electricity prices paid by households......Page 109 Telecommunications......Page 110 Distribution......Page 112 Table 23. Supermarket and hypermarket shares......Page 114 Construction......Page 115 Rental housing......Page 116 Table 24. Private-sector production share of social services......Page 117 Assessment and scope for further action......Page 119 Table 25. Structural Policy Recommendations......Page 120 Background......Page 126 The policy making process and its key players......Page 127 Environmental objectives......Page 129 Environmental policy design......Page 131 Policy instruments......Page 132 Acidification......Page 134 Table 28. Emissions: achievements and targets......Page 135 Figure 30. Exports and imports of air-borne pollutants, 1997......Page 136 Box 8. Sweden’s NOx charge: an effective economic instrument......Page 137 Figure 31. Sources of emissions for sulphur, NOx and ammonia by sector......Page 138 Table 29. Economic instruments for sources of air-borne pollution......Page 140 Box 9. Economic incentives to reduce emissions from shipping......Page 142 Greenhouse gases and global warming......Page 144 Figure 32. CO2emissions by source......Page 145 Policies to reduce CO2emissions......Page 146 Table 30. Energy and CO2 tax rates......Page 147 Appropriate level and mix of taxes......Page 148 Figure 34. Energy and fuel prices in OECD countries, 1999......Page 149 Figure 35. Energy intensity in Sweden and other IEA countries......Page 150 Equalising abatement costs......Page 151 Energy supply......Page 153 Strategy for addressing global warming in the future......Page 155 Water quality......Page 156 Policies to reduce nitrogen......Page 157 Solid waste management......Page 158 Extended producer responsibility......Page 159 Landfill minimisation......Page 161 Conclusions and policy recommendations......Page 162 Box 10. Recommendations for further action......Page 165 Notes......Page 167 Bibliography......Page 174 Table A1. Taxes on capital, 1997......Page 179 Annex II. Extended producer responsibility versus environmental taxes......Page 181 Annex III. Calendar of main economic events......Page 183 Annotation The survey of the Swedish economy covers: recent developments and prospects in the near term; macroeconomic policies; structural policies for improving economic performance; enhancing environmentally sustainable growth. Its overall conclusion is that Sweden is profiting from the macroeconomic and structural reforms undertaken in the wake of the severe recession in the 1990s. Output has been growing at around 4% a year and inflation has been lower than most other OECD countries