Macroeconomic Perspectives on the Nordic Economies: Past, Present, and Future

This chapter reviews the Nordic model in terms of objectives, policies, institutions, and outcomes. First, some long-term patterns of living standards, distribution of income, size of government, etc. are presented and compared to the OECD average. Second, as the Nordic countries recently have been heralded for their economic performance, the behaviour of output, employment, public finances, private credit, etc. in the Nordic countries is compared to macroeconomic developments in other European countries, focusing on consequences of and responses to the great financial crisis. Third, the perceived success of the Nordic countries may be seen as a story about willingness and ability to constantly reform, possibly driven by a strong political and social capital which eventually produces the necessary reforms to maintain the overarching objectives.