OECD Economics Department Working Papers
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
Why has Swedish Inflation been Persistently Low?
Average inflation in Sweden has been one of the lowest among European countries since the mid-
1990s. Three supply-side factors help to explain this phenomenon, all related in some sense to increased
global integration. First, a shift towards imports from low-cost producing countries has resulted in falling
import prices. Second, deregulation and increased product market competition with foreign companies
entering the market has led to price falls in some sectors, notably in retailing. Third, wage growth has
lagged productivity and kept unit labour costs down. This paper reviews these factors and analyzes the
policy options for the central bank.
This paper relates to the OECD Economic Survey of Sweden 2007
(www.oecd.org/eco/surveys/sweden).
Keywords: Riksbank, inflation target, core inflation, Sweden, monetary policy, inflation
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