Five economic lessons from Sweden

The Scandinavian nation of Sweden has accomplished what the United States, Britain and Japan can only dream of: Growing rapidly, creating jobs and gaining a competitive edge. The banks are lending, the housing market booming. The budget is balanced.

The Washington Post:

Stockholm — Almost every developed nation in the world was walloped by the financial crisis, their economies paralyzed, their prospects for the future muddied.

And then there’s Sweden, the rock star of the recovery.

This Scandinavian nation of 9 million people has accomplished what the United States, Britain and Japan can only dream of: Growing rapidly, creating jobs and gaining a competitive edge. The banks are lending, the housing market booming. The budget is balanced.

1. Keep your fiscal house in order when times are good, so you will have more room to maneuver when things are bad.

2. Fiscal stimulus can be more effective when it is automatic.

3. Use monetary policy aggressively

4. Keep the value of your currency flexible.

5. Bankers will always make blunders; just make sure they don’t doom the economy.

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