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The Swedish Model Betrayed, Timothy A. Canova

Timothy A. Canova

This article provides a history of Sweden's financial liberalization, with special attention on the deregulation of interest rates and the ceiling on housing loans from banks and finance institutions. Throughout the 1980's, Sweden's Prime Minister Olof Palme stood out on the international stage as one of the leading opponents of the financial deregulation, monetarism, and fiscal austerity. The article recounts his efforts to resist and then compromise with this neoliberal agenda. After Palme's sudden assassination, in February 1986, the new government accepted a Riksbank proposal for elimination of Sweden's long-standing system of foreign exchange controls - the transnational policy analog …