Economic Slump Analysis

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The current situation of the economic slump in Western countries invites politicians and scholars to look at the past and to draw conclusions from this historical perspective. The period between 1975 and 1995 is interesting because of its similarities with the present modest economic performance. Economic performance can be defined as the achievement of economic objectives such as growth or budgetary stability. The indicators that can be used are varied. This paper mainly focuses on the increase of growth rates; in this way, the Gross Domestic Product (GDP) is the most relevant indicator. The variations of economic performances are related to changes in the economic system’s structure as well as in the policies led to handle economic challenges.…show more content…
Whereas the state enjoyed new economic, social and political frameworks, the crisis of 1975 broke the momentum. The country has been plunged in new economic circumstances and experienced twenty years of poor economic performance. The causes of this brutal reversal are debated among scholars. One of the most common explanations is related to the creation of the Swedish model during the previous decade and the lack of economic freedom. In this context, this paper tries to answer the following questions: To what extent do the Swedish model initiated during the Golden Age blame for the long period of modest economic performances? What are the other reasons that can be put forward to explain this? The answer will be divided into two parts. First, I will argue that the 1975 crisis affected the heart of the previous leading sectors and the policies implemented were one source of modest economic performance. In a second part, I will demonstrate that other important factors must be added to explain this phenomenon and that this period must be…show more content…
The following period was characterised by an economic morass with low growth rates. Some scholars explain this by a failure in the policies led to handle the stagflation: these policies exacerbate the difficulties. The model developed during the Golden Age produced negative results in the following period. Nevertheless, alternative measures, set up in the 1980s, led to the sharpest crisis that slowed down the economic recovery. In this way, this period of poor economic performance seems to find more convincing explanations in structural factors as the emergence of the service sector. A new narrative emerges and underlines the normality of this phenomenon: a transition phase is always characterised by modest economic performances. And it is important to note that these performances are relatively modest but that Sweden continued its onward march between 1975 and

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