It has also proved possible to combine low unemployment, compared with other European countries, with low inflation, contrary to what many experts expected. But open unemployment has only come down towards 4 per cent in a few occasional years, and stands today at 5.5 per cent. The number of employed now is lower than before the crisis, and some 1.2 million people of working age (16-64 years) are not participating in the labour force. The regime shift and employment Against this backdrop it's not surprising that a lively debate arises from time to time about unemployment and what can be done about it. What is perhaps more surprising is that some people still assert that the shift in stabilisation policy regime at the beginning of the 1990s is what has caused unemployment to be higher today than it was during the 1970s and 1980s. Sometimes the argument goes that Sweden has given up its previous objective of full employment in order instead, for some more or less obscure reason, to introduce a target for inflation. If we only were prepared to return to the high-inflation policies of the 1970s and 1980s, then everything would be better. There is much to say about this. Firstly, it is difficult in a more general sense to imagine that the markedly improved stability in economic policy that the shift in regime brought about in the long run could be something negative for employment.
Over the longer term, the instability, whether inherent or not, would decline if we have more developed financial and capital markets and also, by default, a multi-currency system as they reduce the risk concentration on one individual financial market and currency. Conclusion In closing, I believe that policymakers over the world need to focus our effort on all aspects of policy challenges in parallel including surveillance, financial market developments, regulations, and risk management. I strongly believe that market players respond to policy incentives and therefore policymakers have the responsibility to put the right policy and incentives in place. There is no quick fix and it will take a long time and painful adjustment before countries that were at the epicenter of the global crisis can resume normalcy. In Asia, we have taken a decade to strengthen our economic resilience. Because of our past efforts, we have been able to weather this crisis relatively well. That said, our work in Asia is still ongoing to strengthen the policy framework and tools to deal with future crisis that will surely not be the same as the last. Importantly, we are mindful that the world will have much less fiscal space to cushion potential global contraction, should the next crisis hit. While it may be easier to advance these efforts at the national level, achieving policy coordination on the global level will be much more difficult.