The Rehn-Meidner Model in Sweden: Its Rise, Challenges and Survival

Lennart Erixon

No 2008:2, Research Papers in Economics from Stockholm University, Department of Economics

Abstract: A Swedish economic policy was developed by two trade union economists shortly after the Second World War. The Rehn-Meidner model recommends the use of selective employment policy measures, a tight macroeconomic policy and a wage policy of solidarity to combine full employment and equity with price stability and economic growth. Although never consistently applied in Sweden, it is possible to distinguish a golden age for the Rehn-Meidner model from the late 1950s to the early 1970s. In the 1970s and 1980s, Swedish governments abandoned the restrictive macroeconomic means of the Rehn-Meidner programme and decentralised wage bargaining obstructed the wage policy of solidarity. In the 1990s and 2000s a new economic-policy regime could not meet the strong requirement of full employment in the Rehn-Meidner model but it satisfied the model’s priority of selective employment policy within the framework of a restrictive macroeconomic policy.

Keywords: Swedish model; Rehn-Meidner model; third way; labour market policy; wage policy; productivity growth; fiscal policy; unemployment; inflation (search for similar items in EconPapers)
JEL-codes: E24 E31 E62 J23 J31 J62 O23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-lab and nep-mac
Date: 2008-02

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Persistent link: http://EconPapers.repec.org/RePEc:hhs:sunrpe:2008_0002

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