The fact that Sweden has a surplus thus means that saving in Sweden is higher than the level needed to fund Swedish investments. An important reason why saving has been relatively high in Sweden since the mid-1990s is the relatively high level of financial saving in the public sector since the budget consolidation process carried out in connection with the crisis of the 1990s. Another reason is that the Swedish households also increased their saving in connection with this crisis. At the same time, the level of investment in Sweden has been relatively low compared to that in other countries (see Figure 5). This is largely due to relatively low investments in housing.2  2  See for example Chapter 3 in Vredin et al. (2012), Report of the Economic Policy Group 2012, “Simple rules, difficult times: does stabilisation policy need to be changed?”  4  BIS central bankers’ speeches  Figure 5. Total investment as a share of GDP Per cent 30  30 2001-2007  25  2008-2011  25  20  20  15  15  10  10  5  5  0  0  Note. Average value 2001–2007 and 2008–2010. Source: IMF WEO, October 2012. The current account surplus has in fact decreased somewhat in recent years. It was approximately 9 per cent of GDP in 2008 and approximately 7 per cent of GDP in 2011. However, it is still high in historical terms and in comparison with other countries.
European Systemic Risk Board (2011), Recommendation of the European Systemic Risk Board of 22 December 2011 on the macroprudential mandate of national authorities (ESRB/2011/3). Financial Crisis Commission, Preventing and managing financial crises, interim report, SOU 2013:6, 23 January 2013 Fiscal Policy Council (2011), Swedish Fiscal Policy, Report of the Fiscal Policy Council 2011. IMF, World Economic Outlook, October 2009. IMF, World Economic Outlook, October 2012. National Institute of Economic Research, “A Longer Term View of General Government Finances – Developments Will Require More Hours Worked”, The Swedish Economy, December 2005. National Institute of Economic Research, Wage Formation Report 2012. Kuttner, Kenneth (2012), “Low Interest Rates and Housing Bubbles: Still No Smoking Gun”, under publication in Douglas Evanoff (ed. ),The Role of Central Banks in Financial Stability: How Has it Changed?, World Scientific (Hackensack, NJ). Kydland, Finn and Prescott Edward (1977), “Rules rather than discretion: The inconsistency of optimal plans”, Journal of Political Economy, vol. 85, pp. 473–490. OECD Economic Outlook, November 2012. Bill 2007/08: 100, “Spring Fiscal policy Bill 2008”. Bill 2012/13: 1, “Budget Bill 2013”. Sveriges Riksbank, Monetary Policy Report, February 2012. Sveriges Riksbank, Monetary Policy Report, July 2012. Sveriges Riksbank, Minutes of the monetary policy meeting, July 2012. Sveriges Riksbank Monetary Policy Update, December 2012. Statistics Sweden, 2012 “Housing construction low for a long time”, SCB Economic Indicator, no. 2012:92. Svensson, Lars E.O. (2012), “The possible unemployment cost of average inflation below a credible target”, Working Paper, available at http://people.su.se/~leosven/papers/ Phillipsa.pdf. 16  BIS central bankers’ speeches  Svensson, Lars E.O.