• 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
Stockholm 'submarine' hunt
Sweden's 'submarine hunt' moves south
The Swedish Armed Forces have sent out 200 troops. Photo: TT

Sweden's 'submarine hunt' moves south

UPDATED: The Swedish Armed Forces have pushed into their fifth day searching for a suspected foreign vessel in the Stockholm archipelago. READ  

European Union
Extremist saves Sweden Democrats' EU group
Sweden Democrat leader Jimmie Åkesson. Photo: TT

Extremist saves Sweden Democrats' EU group

The EU group that bound several Eurosceptic parties including the Sweden Democrats has been saved by an MEP from a far-right Polish group, just a week after it appeared to have crumbled, according to a UK press report. READ  

Stockholm 'submarine' hunt
Timeline: Mystery 'submarine' in Stockholm
Sweden's Armed Forces are out in force after reports of a foreign vessel in the Stockholm archipelago. Photo: TT

Timeline: Mystery 'submarine' in Stockholm

The world has had its periscope on Sweden since the Swedish military launched an extensive hunt for what is rumoured to be a damaged Russian submarine in the Stockholm archipelago. Here is the timeline of events so far. READ  

Business & Money
Profit leap for Swedbank
A branch of Swedbank in Malmö. Photo. TT

Profit leap for Swedbank

Swedbank has seen its profits rise higher than expected. READ  

New coalition
Sick pay U-turn from Sweden's new coalition
Stefan Löfven has changed his strategy on sick pay. Photo: TT

Sick pay U-turn from Sweden's new coalition

Small businesses won't face rising sick pay costs, following a policy reversal from Sweden's new coalition government. READ  

Presented by CurrencyFair
CurrencyFair: Why it pays when making overseas transfers
CurrencyFair co-founder Brett Meyers

CurrencyFair: Why it pays when making overseas transfers

Tired of losing money when you send cash back home? Join other expats in Sweden who avoid bank fees and hidden charges by sending money internationally with CurrencyFair, an online marketplace where secure transactions are faster and cheaper. READ  

Stockholm 'submarine' hunt
Vessel hunt continues at 'full strength'
Minehunter HMS Koster takes part in the search in the Stockholm archipelago on Sunday. Photo: Marko Säävälä/TT

Vessel hunt continues at 'full strength'

The search for a suspected foreign vessel in the Stockholm archipelago continues with "full strength" on Tuesday morning, according to Sweden's armed forces. READ  

Ebola crisis
Sweden hit by two Ebola false alarms in two days
The Uppsala University Hospital. Photo: TT

Sweden hit by two Ebola false alarms in two days

UPDATED: A patient has been cleared of any Ebola suspicions at the Uppsala University Hospital. It marks the second suspected case in Sweden in two days. READ  

Analysis
Why a foreign vessel lurks in Swedish waters
The HMS Stockholm patrols Jungfrufjärden in the Stockholm archipelago on Monday morning. Photo: Anders Wiklund/TT

Why a foreign vessel lurks in Swedish waters

With Sweden engaged in its biggest domestic military operation since the Cold War, The Local spoke to Johan Wiktorin, a fellow at the Swedish Royal Academy of War Sciences, to get insight into what’s going on in the Stockholm archipelago. READ  

My Swedish Career
US woman starts up Swedish toy store online
Leigh Neil and a llama hand puppet. Photo: Private

US woman starts up Swedish toy store online

For this week's My Swedish Career we meet Leigh Neil, who one day came to realize that there was a gap in the Swedish market for children's toys and decided to do something about it. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
National
Sweden deploys troops over underwater threat
Gallery
People-watching: October 19th
TT
Society
QUIZ: How good is your Swedish?
Blog updates

19 October

Getting it (Blogweiser) »

"Follow Joel Sherwood on FB Few watch baseball in Sweden. This is excellent when your team loses..." READ »

 

17 October

Editor’s Blog, Oct 17th (The Local Sweden) »

"Hi readers, Here’s the whole week of news in just 60 seconds. The most-read story was about a..." READ »

 
 
 
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
National
A Touch of Scandinavia: Reindeer in the kitchen
Lifestyle
What's on in Sweden: October 17th - 24th
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Lifestyle
Sweden's The Bridge to become 'more Danish'
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
What's on in Sweden: October 10th - 17th
National
Stockholm is 'best' region for well-being
Gallery
People-watching: October 8th
National
Five facts to know about Patrick Modiano
Society
My Swedish Career: A French fashionista in Sweden
Society
Swede's anti-bully Facebook tale goes viral
Society
Have you seen Sweden's viral subway cancer campaign?
National
Isis: Swedes linked to Turkish prisoner swap
National
Should Swedes be banned from buying sex abroad?
Gallery
Fredrik Reinfeldt's leaving presents
National
Five Swedish TV shows you shouldn't miss
Gallery
A tool belt, a casserole, and a book. Fredrik Reinfeldt's parliament gifts
TT
Lifestyle
Top five winter festivals in Sweden
TT
National
Sami reindeer herders win mine reprieve
Gallery
Property of the Week: Gamla Enskede
Sponsored Article
How to catch the first lobster of the year
Politics
Ten new minister faces you should know
Tech
First womb transplant baby in world born in Sweden
Gallery
People-watching: October 5th
National
What's on in Sweden
National
Sweden rethinks Afghan translators' protection
Society
Interview with Geena Davis: 'I want to be in a Swedish movie'
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
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

1,005
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