Economic Survey of Sweden 2008: Fiscal policy: what should the targets be?
The current fiscal policy framework was introduced after the crisis of the early 1990s as part of a stability-oriented macroeconomic policy framework. The simple but clear surplus target has been successful at achieving fiscal consolidation, but it may now be time to refine the fiscal strategy to ensure that the sound fiscal position can be sustained in the long term. This chapter assesses the achievements of the current framework and suggests more clearly underpinning the fiscal targets by long-term sustainability and intergenerational equity considerations. Key questions are what future fiscal pressures should be expected and to what extent alternative policies can be used to deal with them: pre-funding, increased labour utilisation, raising efficiency in public service provision via competition and user choice and shifting the balance between public and private funding.
Long abstract
