Budget Deficits and the Public Debt in Sweden: The Case for Fiscal Consolidation

Desmond Lachman
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Desmond Lachman: International Monetary Fund

IMF Staff Papers, 1994, vol. 41, issue 3, 502-516

Abstract: Since the late 1980s, there has been an abrupt turnaround in Sweden's public finances. The present paper makes the case for the very early adoption of a policy of medium-term fiscal consolidation in Sweden, notwithstanding the presently relatively depressed state of the Swedish economy. It does so by examining the reasons why large public deficits and the buildup of public debt might be detrimental to future economic performance; by reviewing how the maintenance of large deficits might undermine credibility in markets; and by looking at the experience of a number of countries that have undertaken successful programs of fiscal consolidation.

JEL-codes: E62 F31 H30 H60 (search for similar items in EconPapers)
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:pal:imfstp:v:41:y:1994:i:3:p:502-516

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