The various form of pattern bargaining with manufacturing, as representative of the tradables sector, deciding the norm for wage increases in the Nordic countries are reviewed. This form of bargaining has been consistent with strong international competitiveness and has widespread support among...

A perceived need to increase nominal wage flexibility as a substitute for domestic monetary policy and a tendency to less wage moderation are likely to promote bargaining co-ordination and social pacts in the EMU. But such co-ordination is not likely to be sustainable in the long run, as it...

We show in a union-bargaining model that a decrease in the unemployment benefit level increases not only equilibrium employment, but also nominal wage flexibility, and thus reduces employment variations in the case of nominal shocks. Long-term wage contracts lead to highter expected real wages...

The Swedish experiences of the 1990s provide a unique example of how large-scale active labour market programmes (ALMPs) have been used as a means to fight high unemployment. This paper surveys the empirical studies of the effects of ALMPs in Sweden. On the whole, ALMPs have probably reduced...

Membership in a monetary union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than nonmembership. For example, entry into a monetary union may cause a move from a non-indexation to an indexation equilibrium. But more wage...

The paper analyses theoretically what role fiscal councils could play and surveys empirically the activities of existing councils. Case studies of the Swedish Fiscal Policy Council and the UK Office for Budget Responsibility are done. It is concluded that fiscal councils should be advisory,...

Pattern bargaining with the tradables (manufacturing) sector as wage leader is a common form of wage bargaining in Europe. We question the conventional wisdom that such bargaining produces wage restraint. In our model all forms of pattern bargaining give the same outcomes as uncoordinated...

EU-level fiscal rules have not been able to prevent the large-scale accumulation of government debt in many eurozone countries. One explanation was major flaws in the rules. Some of these flaws have now been corrected. But the failure of the rules depended also on fundamental problems of time...

The paper describes the monetary and fiscal policy frameworks in Sweden and analyses how they were established as well as current challenges. Sweden provides a good example of how deep economic crisis, in interaction with independent thinking by academics and other experts as well as policy...