Monetary policy in Sweden

Abstract

The article briefly but vividly examines the main features and developments of recent credit control measures in Sweden, and the core of certain interesting “lessons” furnished by the Swedish experience. The paper is centred on the examination of the new directions which gradually emerged from the “cheap and easy money” period and led to the credit policy introduced in February 1952 - a policy which, without relinquishing qualitative restrictions, puts the accent on quantitative ones. As a result, according to the author, “monetary policy is again given its logical role as a stabilising influence in the economy. However, this change in the official attitude does not mean a simple return to orthodoxy in the monetary field. The kind of restrictive monetary policy that has been developed in Sweden in the last few years is quite unorthodox in the sense that it does not operate through an increase in the cost of money but mainly through an increased scarcity of loanable funds”.

JEL: E52