This means that unemployment in Sweden is as high as that in the United States and almost as high as in the United Kingdom (7.9 per cent). At the same time, unemployment is much lower in other countries that should reasonably be comparable with Sweden, such as Germany (5.4 per cent), the Netherlands (5.4 per cent), Austria (4.4 per cent) and Norway (3 per cent).24  22  I describe this in more detail in, for instance, Svensson (2011a). 23  National Institute of Economic Research (2012, Figures 12 and 43). 24  Data gathered from Eurostat and the Bureau of Labor Statistics. As a result of the differences in publication dates between the countries, the most recent figures refer to July with regard to the United Kingdom and Norway, and to September for the Netherlands, Germany, Austria, Sweden and the United States.
The low inflation as such has no doubt helped to make the economy function better. The conditions for a long, stable upswing have improved. Together with clearer price signals, this makes it easier for households and firms to plan and make decisions. The workings of the economy have also been improved by the tax reform, various deregulations and changes to social security systems. Competitive pressure has grown as a result of EU membership and the globalisation of trade. The result is discernible in a higher rate of capital formation and structural changes in the economy. In both 1994 and 1995 GDP growth topped 3 per cent. In 1996 the growth of final demand remained fairly high, 2.1 per cent, and the rate accelerated in the second half-year to 2.6 BIS Review 56/1997  -3-  per cent from the corresponding period the year before. Total production, however, did not match the growth of final demand, the reason being that firms chose to trim stocks. The growth of GDP, which represents total output, stopped at 1.1 per cent in 1996.