These are all based on a reliable monetary policy with an average inflation rate of 2 per cent, but the assessments of productivity growth can differ. One problem in this context is that it is not self-evident which sectors should be used for measuring productivity growth. The public sector is particularly difficult to measure and productivity growth here is therefore often assumed to be zero. This means that a rule of thumb based on productivity growth in the economy as a whole is "conservative" in the sense that it gives a slightly lower scope for wage costs than other approaches. Despite the problems, the different approaches tend to give rather similar results in an interval of 3.5-4 per cent. Of course, there is reason to be cautious when making this type of assessment. Past experiences of wage formation in Sweden are that a wage cost norm can easily be perceived as a floor for negotiation. Another factor advocating caution is that Sweden could be a member of the Eurosystem in the not too distant future. In recent years, wage costs in trade and industry have risen by just over one percentage point more in Sweden than in the euro area. This is not sustainable unless productivity also rises at a more rapid rate in Sweden. A further factor calling for restraint is that the favourable productivity growth prevailing during the greater part of the 1990s was partly explained by growth in the telecom sector.
He would lose his contract and a different forecasting firm would be hired. In this way, the blame was externalised elegantly. It is not surprising that under such circumstances the young economist had to reassess his professional situation and to look for other fields to develop his skills. But he kept many valuable souvenirs. Don’t forget that he acquired first-hand knowledge of what a powerful giant multinational company can be, but also how fragile it can become when the growth of its organisation is not sufficiently controlled. - Incidentally, this same company is still prospering, but over the decades it has been thoroughly reorganised many times. Restructuring has become a habit. If the former young economist revisited “his” company today, he would not recognise it anymore. The complicated matrix organisation, including the central staff of economics, has disappeared. Responsibility is structured in much simpler ways. The hierarchy is considerably flatter. The game of externalising blame can no longer be played as easily as in former times. Even the quality of food and wine served at the visitors’  2  4  http://www.bls.gov/oco/ocos055.htm. BIS Review 62/2004  restaurant is more modest. One might still be offered a cigar after lunch, but the selection would most likely be narrower than in the ‘good old days’. With respect to the disappearance of economics units in business corporations, John J. Casson writes: “During the past two decades, several corporations, including IBM, Citibank, American Express and General Electric, eliminated their economists units.