If this situation progresses further, the market functioning could be overly constrained. In fact, from around early 2018, as confidence in the effectiveness of yield curve control strengthened, daily fluctuations in JGB yields clearly became smaller and the JGB transaction volume also showed a decreasing trend (Chart 7).
During the last 10 years the average economic growth in the Nordic countries has been stronger than in the EU-15 in average. Does the good economic performance of Nordic countries mean that the economics textbooks are wrong and that incentives and markets do not really matter that much? The answer is a resounding no.