Monday, 20 June 2011
Trouble ahead for Sweden? It’s aiming for a balanced budget.
Looks like Sweden is aiming for a balanced budget (hat tip to Marc Robinson).
As I’ve pointed out more than once on this blog, any country which aims for inflation of around 2% will need to run a significant deficit just to prevent its monetary base and national debt declining relative to GDP at 2% a year. If it doesn’t have that deficit, private sector saving desires may not be met, which may mean paradox of thrift unemployment.