• Sweden edition
 
'We're not Japan': Swedish Riksbank
Österberg and Gernandt. File photo: TT

'We're not Japan': Swedish Riksbank

Published: 29 Apr 2014 21:03 GMT+02:00
Updated: 29 Apr 2014 21:03 GMT+02:00

The Nobel Prize-winning economist took to his New York Times column last week to explain why he thought Sweden had gone from "role model" and "rock star" to making policy dominated by "sadomonetarists".

The issue at stake was the Riksbank's decision in 2010 to raise the repo rate at what Krugman considered to be the wrong time.

"Sadomonetarism is an attitude, common among monetary officials and commentators, that involves a visceral dislike for low interest rates and easy money, even when unemployment is high and inflation is low," he wrote.

The Swedish Riksbank's Governing Board Chairman Johan Gernandt said he did not accept that description.

"Not at all," he told The Local on Tuesday. "I think it's an unfair statement just to make headlines."

Gernandt and the Riksbank Governing Board Vice Chairman Sven-Erik Österberg penned a reply to Krugman that was published by the New York Times on Monday.

"We object to Paul Krugman’s claim that as a consequence of monetary policy mistakes, Sweden has been caught in a spiral of stagnation and deflation and thus 'turned itself into Japan'," they wrote.

Why respond to Krugman in the first place?

"We were of the firm opinion that he was not fair in his criticism, that his choice of words was not justified, and that he was actually misleading his audience," Gernandt told The Local on Tuesday. "Regretfully, the number of words we were allowed to use in the New York Times was very limited, but we hope the message has been delivered."

The duo's letter explained that the Swedish economy was actually doing rather well.

"Swedish gross domestic product growth in the aftermath of the crisis has been strong, increasing 1.5 percent during 2013 (and by 3.1 percent in the fourth quarter)," they pointed out. "Paired with a continuing increase in employment, this can, in our view, hardly be described as a stagnating economy."

Gernandt said it was "quite rare" that he and Österberg together would weigh in on public debate.

"In our opinion, this (letter) was necessary for an international audience to point out that the Swedish economy stands strong," he told The Local. "It's one of the strongest countries in Europe as a matter of fact."

Ann Törnkvist (ann.tornkvist@thelocal.com)

Your comments about this article

Today's headlines
National
King Carl XVI Gustaf opens parliament
King Carl XVI Gustaf arriving on Tuesday afternoon. Photo: TT

King Carl XVI Gustaf opens parliament

BREAKING: Sweden's post-election parliament is meeting for the first time following a fanfare opening from King Carl XVI Gustaf. READ  

Opinion
Should Sweden's school age be raised?
A high school in Stockholm. Photo: TT

Should Sweden's school age be raised?

After the new coalition announced plans to extend Sweden's compulsory schooling until the age of 18, The Local asked two Swedes at high school if they agreed with the idea. READ  

International
Sweden slammed for ecological footprint
Sweden should increase its renewable energy according to WWF. Photo:TT

Sweden slammed for ecological footprint

Sweden is among the world's top ten polluters according to one of the largest scientific studies looking at the impact of humans on earth, produced by the WWF. READ  

Society
Swede's necklace found after 52 years in lake
Ing-Marie Olofsson whose necklace was found. Photo: Private

Swede's necklace found after 52 years in lake

A 66-year-old Swedish woman got the surprise of her life when a fisherman returned the necklace she dropped in a lake at the age of 14. READ  

International
Apology for Swedish model's stolen photos
Malin Sahlén during a Top Model shoot. Photo: TV3/Nina Holma

Apology for Swedish model's stolen photos

A British newspaper has apologised after a freelance journalist stole a Sweden's Next Top Model contestant's photo and created a fake Twitter account used to trick a UK minister. READ  

Brand stories
Johanna N: beautiful jewellery with a story

Johanna N: beautiful jewellery with a story

Aged just 27 and already living off of her own designs, some may consider Johanna Nilsson lucky. But she doesn't believe in luck. She's the founder of a jewellery line blending sustainability, subtle style, and Scandinavian simplicity - and it's taking the world by storm. READ  

Sport
Heel injury sidelines Zlatan in Barcelona clash
Photo: AP

Heel injury sidelines Zlatan in Barcelona clash

Paris Saint-Germain star Zlatan Ibrahimovic will miss Tuesday's Champions League clash with Barcelona at the Parc des Princes due to a nagging heel problem, the French club have confirmed. READ  

National
Stockholm patient tests negative after Ebola fears
The Infection Clinic at the Karolinska University Hospital in Huddinge. Photo: TT

Stockholm patient tests negative after Ebola fears

A patient in a Stockholm hospital who was suspected of having contracted the Ebola virus was given the all clear on Tuesday morning. READ  

Elections 2014
New coalition agrees on defence and migration
A Jas Gripen. Photo: TT

New coalition agrees on defence and migration

UPDATED: The Green Party has committed itself to expanding Sweden's defence force, while the Social Democrats have compromised on work permits for migrants. READ  

National
Fresh Ebola case investigated in Sweden
The patient is being treated at the Karolinska University Hospital. Photo: TT

Fresh Ebola case investigated in Sweden

Doctors in Stockholm are checking a patient suspected of having contracted the Ebola virus. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Fastighetsbyrån
Gallery
Property of the week: Botkyrka
Education
New government to make school compulsory to 18
Politics
Sweden Democrat wins Deputy Speaker spot
National
Swedish scientists sneak Bob Dylan lyrics into articles
Lifestyle
The five best Swedish songs of the month
Blog updates

28 September

Spoiled Doyle (Blogweiser) »

"What you gotta watch out for in Sweden is the good stuff. http://www.youtube.com/watch?v=Re_EzUe6xpI In Sweden, it’s the good things you have to watch out for. Video on @TheLocalSweden http://t.co/rAb8eGFdTD pic.twitter.com/w37YYwMXy1 — Joel Sherwood (@joeldsherwood) September 29, 2014 " READ »

 

26 September

 (The Local Sweden) »

"Hi readers, Autumn swept into Sweden at the start of this week with snow in the north of the country and flooding in the south. As well as a change in the weather, Sweden’s change in political direction became clearer, with Social Democrat leader Stefan Lofven formally announcing his party would work with the Greens as..." READ »

 
 
 
Gallery
People-watching: September 28th
National
When Italian style meets Swedish simplicity
Lifestyle
Review: Sweden's first alcohol-free nightclub
Gallery
In Pictures: The MS Estonia disaster
Lifestyle
Ten things expat women notice in Sweden
Politics
What's next on Sweden's political stage?
Gallery
Sweden's 2014 election: Most memorable moments
Society
What's on in Sweden
Gallery
People-watching: September 24th
Seaman Oliver Gee with his first lobster
Lifestyle
How to catch the first lobster of the year
Gallery
In Pictures: Fredrik Reinfeldt through the years.
Society
Plucked out of Canada for love and guitars
Politics
How Sweden Democrats went mainstream
Politics
Scandinavia and Scotland: closer links?
Sponsored Article
How to start a business in Stockholm
Society
Why is Stockholm's Södermalm so cool?
Politics
Sweden elections: Who's who?
Sponsored Article
Introducing… Insurance in Stockholm
Gallery
Princess Estelle through the years
Business & Money
Five golden rules for the Swedish job hunt
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

877
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN