Economic Outlook, Autumn 2014 (Summary)

More than six years have passed since the acute financial crash in autumn 2008. The international economy is still coloured by the repercussions of the crisis. Central banks have put in place major monetary policy stimulation measures. In the euro area an ill-designed austerity policy has been implemented that has held back economic recovery and counteracted the more active monetary policy.

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LO economists' proposals

All conditions for active fiscal policy to be effective are in place and have been so for a long time. It is probable that at no time in the post-war period has Sweden ever had greater reason to implement substantial fiscal policy stimulation. The LO economists propose initiatives equivalent to SEK 70 billion, SEK 55 billion of which constitutes permanent weakening of public finances. In our opinion the stimulus package will lead to an increase in employment of just over 100,000 people and a fall in unemployment of about 2 percentage points.