Sub-report in this year's Long-Term Survey written by Karl Walentin
Karl Walentin, guest professor at the Department of Economics, has been involved in drafting a sub-report for the Long-Term Survey, which celebrates its 75th anniversary this year. This comprehensive commission is conducted every four years with varying themes, and this year's focus is on Fiscal Policy Stabilization of the Economy.
In his background report, "Penning- och finanspolitisk konjunkturstabilisering," Walentin argues for revising the goals of stabilization policy and emphasizes the need for active fiscal policy to play a larger role alongside monetary policy. He points out that the current frameworks for both fiscal and monetary policies were established in the 1990s and that today's changed conditions require a revaluation.
– Today, there is no government authority with a clear responsibility for stabilizing the real economy, such as GDP or unemployment. I argue that this is problematic and that monetary policy (the Riksbank) and fiscal policy (the Ministry of Finance) should jointly assume this responsibility and balance it against stabilizing inflation, says Karl Walentin.