Sweden is a model of social democracy in which the Social Democratic Party has long been in power, and in which distribution under the conditions of monopoly capitalism has been the object of one-sided praise. Wealth and income inequality in Sweden was in the past relatively low, but in recent...

Considerable micro-level evidence suggests that price/wage contract durations fluctuate with the state of the economy, particularly inflation; nonetheless, macro-level evidence for this is scarce. We incorporate state-dependent price/wage setting into an open economy DSGE model to investigate...