The same applies in principle to consumers, who can search the internet quickly for inexpensive goods and services. It is still the case, however, that the price difference between products sold on the internet and in shops is relatively small. But this will probably change as the internet is developed and more people use it. Sweden, spearheaded by the telecom company Ericsson, is one of the countries where the IT sector is large. This sector is also contributing a growing share to our annual output. Sweden is, moreover, one of the countries that is spending most on the introduction of new information technology in various economic sectors. The introduction and development of information technology in Sweden is facilitated by a capital market that is efficient, particularly as regards the supply of venture capital. I mention this to underscore the part that the deregulation of capital and currency markets in the 1980s is playing for the path of growth today. Another crucial factor has been the removal of transaction taxes on equity and bonds after an experimental phase in the late 1980s; that, too, is worth recalling as the old idea of a Tobin tax is being revived in some quarters. Improvements in productivity and flexibility National accounts data from Statistics Sweden suggest that our economy is now capable of growing faster than in recent decades. It looks as though the higher productivity growth is not only attributable to rising activity.
Stable economic policy interacts with structural changes and IT In order to see why the Swedish economy is doing better than it has been for a very long time, we need to consider how economic policy has been realigned in the past decade and a half. Credit and currency markets have been deregulated, the tax system has been reformed, components of the system of transfers have been modified and competitive pressure has increased. All this has helped to improve the workings of our economy. Moreover, price stability is now monetary policy’s statutory objective and it has been explicitly assigned to what has become even a formally independent central bank. Low inflation is admittedly not an ultimate objective for economic policy in general. It serves instead as an instrument. All those who experienced the economic situation in Sweden in the 1970s and 1980s know that inflation can never be associated with an economic development that is lastingly favourable. That is why price stability is an integral part of any economic policy’s strategy for rising prosperity and high employment. In order to provide a stable and credible framework for the new direction of economic policy, the government budget was successfully consolidated. Difficult political considerations and decisions were involved in this process and opinions may differ about particular items or aspects of the consolidation policy; but that does not detract from the main impression of a successful outcome in the sense that economic policy’s commitment to stability was rendered credible.