The popular explanation for the Swedish boom to bust cycle is that the liberalisation of financial markets in the mid 1980s spurred a consumption boom, which had grave consequences when the economy was hit by large macroeconomic shocks in the early 1990s. We take another look at the boom period,...

This paper tries out a variety of approaches to examine three questions. How did the major Swedish tax reform of 1991, which implied lower tax rates and a sharp increase in real after-tax borrowing rates, affect aggregate consumption? How did the tax reform affect household savings composition?...

According to a growing number of critics, the process of financial liberalization in the 1980s is to blame for the volatile macroeconomic development in a number of countries, including the United Kingdom and the Nordic countries. The authors examine how financial deregulation affected one...