Abstract

After almost a decade of expansion in the 1980s, the Swedish economy entered into a deep recession beginning in the first quarter of 1990. The cumulative decline in output during this recession, which lasted a full three years, was around 7 ½ percent. This makes the recent recession the longest and deepest since the 1930s. Moreover, it contrasts sharply with the previous recession of 1980-81, which lasted barely one year and during which output declined by only about 2 ¾ percent (Chart 2-1). Since the second quarter of 1993, a significant, albeit unbalanced, recovery has been under way, driven in the initial stages primarily by a major strengthening of the external sector.

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