Then, I will address resource utilisation’s significance for monetary policy, give an account of the Riksbank’s calculations of potential GDP, discuss the impact of the financial crisis on potential GDP, give an account of different measures of resource utilisation and what they say about resource utilisation at present, and conclude by addressing the need for continued analyses. GDP grows over time, but the rate of growth varies GDP growth since 1950 is illustrated in Figures 1 and 2. What is known as an HP trend is also included in the figures. I will return to these HP trends later. Seen over the entire period from 1950 to 2010, GDP has increased by an average of 2.7 per cent per year. Growth was significantly stronger in the 1950s and 1960s compared with the 1970s and 1980s. There then followed a ten-year period from the mid-1990s with relatively rapid GDP growth and associated relatively rapid productivity growth. In earlier seminars, we have discussed the reasons for the strong productivity growth during this later period. I myself have pointed out a number of possible explanations.1 Globalisation through the expansion of the EU, the opening up of the economies of eastern Europe and China’s rapidly-growing international trade have increased competition, which has been particularly significant for Sweden, with our substantial foreign trade and high proportion of international companies. Furthermore, a number of product markets were deregulated in the 1990s (taxis, domestic flights, postal services, telecommunications, electricity etc.). Sweden also has high proportions of IT production and IT use in production.
At the same time, there are imbalances in the sense that relative wages do not attract applicants for employment to the areas in the labour market where there are shortages. The challenge is to find a solution within the framework of the scope for pay increases created by the growth in productivity and inflationary expectations on a level with the target. Make use of available opportunities Sweden’s opportunities for regaining some lost ground in the prosperity league are good. Our country has a population which has taken to new technology in the field of IT more quickly than in many other countries; computer use is widespread at workplaces and also homes. According to a SIFO survey, 3.5 million Swedes surf the Internet - almost half of the population aged between 12 and 79. No fewer than 2 million Swedes surf every day. Even more remarkable is the fact that almost 20% of the age groups between 50 and 80 are active on the Internet. Together with some other countries, Sweden takes the absolutely leading position with regard to the use of IT, computers and mobile telephones. Young new entrepreneurs are starting successful businesses within the new areas alongside giants such as Ericsson. Pharmaceutical research and biotechnology are other areas where Sweden is well to the fore. Sweden is investing more in research in proportion to GDP than any other country in the world.