Good monetary policies produce good non-monetary policies
Keynesians like Paul Krugman have complained that the US didn’t really do any fiscal stimulus; partly because of “50 little Hoovers,” and partly because Congress got cold feet after the first stimulus package ballooned the deficit. At times it seemed like he thought America was just too unenlightened to see the wisdom of Keynesian stimulus. Too much Fox News and too many Republicans.
That got me thinking about a line in the Swedish monetary report that I discussed in my previous post:
Denmark’s GDP increased by about 4 per cent during the third quarter compared with the previous quarter on an annual rate (see Figure 3:13). This was slightly more than expected for December. The recovery of consumption and strong exports contributed to the high growth. However, growth is expected to be dampened this year, among other reasons as a consequence of the fiscal policy austerity package adopted in May last year.
Denmark’s recovery has certainly been much more sluggish than Sweden’s. I attributed the difference to monetary policy, but I suppose fiscal policy might also have played a role. Yet that just leads to a deeper question, why would a civic-minded social welfare state like Denmark have pursued fiscal austerity in 2010, a period when output was still quite depressed? Maybe Alex Tabarrok is right, fiscal policy is much more endogenous than we assume.
In recent versions of the Keynesian model discussed by Eggertsson and Krugman, austerity during a recession can be self-defeating, leading to deflationary expectations that worsen the downturn. But unless I am mistaken, that result assumes a large closed economy. Because Denmark chose to fix its currency to the euro, it has little control over its price level, which is set by the ECB in Frankfort. In that case an internal devaluation might just work, or at least might be worth a shot. In other words, Denmark behaves more like an American state than an autonomous country. (Of course that begs the question of why didn’t Denmark devalue. Does anyone know why Denmark joined the ERM II, but Sweden didn’t?)
In contrast, Sweden has its own monetary policy, and was able to engineer more rapid GDP growth than Denmark. Their public finances were in better shape because faster NGDP growth means more revenue and less unemployment compensation:
Strong public finances
General government net lending has shown a remarkable degree of strengthening over the first three quarters of 2010. This can primarily be explained by the rapid turnaround of the labour market. Expenditure on unemployment benefit is decreasing, as is expenditure related to sickness and ill-health. Preliminary tax payments also indicate that corporate taxes increased during 2010. For the full year 2010, general government net lending is expected to become positive and to amount to 0.6 per cent of GDP.
I probably shouldn’t spin such an intricate theory based on a few scraps of information. Perhaps some Nordic readers can tell me whether I have my facts right.
I also found some pretty shrewd observations about the US recovery:
Developments on the US housing market may have led to structural problems on the US labour market. Many unemployed workers need to turn to new industries and regions. At the same time, many of the unemployed are reluctant to move due to the risk of making a loss on the sale of their
homes. . . .In addition, the period during which unemployment benefit may be received has been extended, which may have decreased willingness among the unemployed to seek work. This may have had a negative effect on matching. If these extended benefit periods are seen as a temporary element of a cyclical policy, this effect will be transitory. All in all, it is too early to reach any clear conclusions regarding matching efficiency over the longer term, although an abnormal deterioration of matching cannot be ruled out during the current cycle.
The first point relates to Arnold Kling’s recalculation argument. The second argument has been made by RBC-types like Casey Mulligan. I’ve always agreed that there is some truth to these two arguments, but have also insisted that our problems are mostly demand-side. And I’ve made another argument that I think people have overlooked—that supply and demand shocks get “entangled.” Both of the problems cited above occurred partly because America’s NGDP fell 8% below trend between mid-2008 and mid-2009. If that doesn’t happen, there is little chance that Congress extends UI to 99 weeks, and the housing market would have been somewhat stronger. The Riksbank is exactly right in assuming that the 99 week UI is transitory, and (by implication) that a faster economic recovery would help improve the “supply-side” of the US economy.
Supply and demand shocks are often treated separately in our textbooks. In practice they are entangled in all sorts of ways. The mid-2008 energy price bubble hurt energy-intensive capital goods makers, such as car companies. That reduced the Walrasian equilibrium real rate, and made monetary policy effectively tighter. Even worse, the high headline inflation rates frightened the Fed away from cutting rates after Lehman failed in mid-September, even though all the forward-looking indicators suggested a weakening economy and falling inflation. BTW, the Riksbank seems to have been influenced by the “target the forecast” approach of Lars Svensson–not as much as he or I would have liked, but more so than the Fed.
In recent days the world’s been hit by an adverse supply shock, as worries about Libya drive up oil prices. Less obvious is the effect on AD. Although one might assume that high oil prices lead to high inflation, and high inflation leads to high nominal interest rates, nominal bond yields have actually plunged sharply, indicating an expected slowdown in NGDP growth (as compared to the strong growth expected just a week ago.) Let’s hope the Fed reacts appropriately, and doesn’t repeat its tragic error of September 2008.
In Sweden, labor market flexibility seems to be moving in exactly the opposite direction as the US:
In recent years, the government has implemented a series of measures aimed at getting more people into work. Among other objectives, these measures are aimed at increasing incentives to seek work, which is contributing towards the increase of the labour force.
Whereas the US labor force is growing more slowly than our population, in Sweden it is expected to grow more rapidly for every single year from 2009-13. Any conservative who favors neoliberal policy reforms should pray for faster NGDP growth—it will speed up the day when we can start to put some flexibility back into the US economy.
23. February 2011 at 11:30
“Of course that begs the question of why didn’t Denmark devalue. Does anyone know why Denmark joined the ERM II, but Sweden didn’t?”
Denmarks fixed exchange rate policy towards the Euro (and before that the D-mark) has been in effect since 1982 and is by politicians seen as a major reason behind the improvement in the Danish economy in the 1980’s compared to the 1970’s. Today the policy is sacrosanct and it is probably more likely that Denmark will join the Euro (fairly unlikely for the foreseeable future) than get rid of the fixed exchange rate policy.
Sweden on the other hand has had a floating exchange rate since 1992.
23. February 2011 at 11:44
Europe’s national economies are so integrated, I think that blurs the “successful” monetary policies of one nation vs. the next. Other currents are in place, such as fiscal policies, trade, migration, continental economic growth, regulations, social welfare. You have a soup–good luck fashioning a compelling argument for anything.
Besides, Americans are wary of anything that smacks of a weak socialized Euro way of doing things. Saying that “Sweden does a better job,” is to lose the argument.
Better to fashion NGDP targeting and QE as a robust, aggressive American response to a problem, not the sort of weak, enfeebled action taken by, oh, say, the Bank of Japan.
23. February 2011 at 12:32
“In recent days the world’s been hit by an adverse supply shock, as worries about Libya drive up oil prices. Less obvious is the effect on AD. Although one might assume that high oil prices lead to high inflation, and high inflation leads to high nominal interest rates, nominal bond yields have actually plunged sharply, indicating an expected slowdown in NGDP growth (as compared to the strong growth expected just a week ago.) Let’s hope the Fed reacts appropriately, and doesn’t repeat its tragic error of September 2008.”
So this time as oil prices spike, we should print more money? How much more using 2008 as a guide?
I don’t even know if Ben can get away with it.
I suspect that if the economy craters again, Obama falls to sub 40%, loses big in 2012, and any possible hope public employees have of a forgiving electorate leaving them some wiggle room is over.
President Christie, VP Daniels / Perry will redo Reagan.
—–
I STILL think the smart thing is:
1. raise rates.
2. force the banks into mark-to-market.
3. sell all the houses for pennies on the dollar.
And if while we’re doing that, the Fed / FDIC is needed to oversee the liquidation of the banking industry -so be it.
At this point, after seeing PE unions beaten bloody, liberals likely will be far less forgiving of the banksters…
And we can finally have a true bipartisan policy led by the Tea Party.
23. February 2011 at 12:48
@Morgan
“So this time as oil prices spike, we should print more money? How much more using 2008 as a guide?”
Delicious, delicious 70’s.
“President Christie, VP Daniels / Perry will redo Reagan.”
Perry won’t go for VP, he’s president of the republican governor’s association and is doing his best to make the president’s job irrelevant. He’s stated that his plan is to make the federal government irrelevant.
23. February 2011 at 12:54
Hi Scott,
you wrote: “In recent days the world’s been hit by an adverse supply shock, as worries about Libya drive up oil prices. Less obvious is the effect on AD.”
The effect on AD of a reduction in AS is a contraction in AD (i.e. movement up the AD curve). Was your quote asking whether there would also be a shift in the AD curve?
Also, a point related to your question about why some people think of f/p as affecting RGDP, and m/p as affecting inflation: this dichotomy is entirely inconsistent with the fiscal theory of the price level. (This point may have been made in your earlier post, so apologies for the possible repetition)
Alan
23. February 2011 at 13:37
It is little known but being a member of the EU obliges that state to eventually adopt the euro. The only nations with a legal opt-out from eurozone membership are Denmark and the UK. The opt-outs were negotiated in 1992 at the Edinburgh Agreement. Sweden did not join the EU until 1995. So Sweden are obliged to adopt the euro but their population have rejected it in a referendum. Through treaty obligations, Sweden really should be in ERM 11 in order to meet the convergence criteria. However, their non-participation is tolerated by the ECB, who have warned newer members that they will not tolerate non-participation.
23. February 2011 at 13:43
Delicious 70’s?
If the whole point is to have a specific goal, and that goal is 5% NGDP, then the hawks should have been screaming in the 70’s to tighten things down because NGDP was running way over 5%, whereas today we are still below any 5% NGDP trend.
23. February 2011 at 13:53
Casey Mulligan made a great film about why socialised healthcare is immoral. Unfortunately everyone who saw it completely missed the point.
Oh wait, that was Carey Mulligan.
23. February 2011 at 13:54
Scott,
Treasury yields are down, but not as much as one would have expected. In fact, the 5yr auction went quite poorly today, and the 30yr bond was hardly down. This should not be surprising. Slowing RGDP means out-year fiscal deficit projections explode: they are quite sensitive to “initial conditions”, and in particular, the strength of our recovery. Its not hard for markets to worry about the type of deficit-financing disaster scenario that Bernanke himself talked about in this latest speech.
Slowing growth might, in the near future, bring higher yields, just as happened in the Nineties in most Latin countries and, today, in the PIIGS.
23. February 2011 at 14:23
Dustin,
Yep that’s exactly what I asking. One of my few complaints here is that Scott doesn’t really let everyone know what he’d have done in 2004-2006, so 2008 didn’t happen.
Doc, I really like Perry, Daniels, and Christie, so I’m going to continue to suspend disbelief, and hope Perry runs and takes #2. Two governors who dial back unions, deregulate economies, and never talk about social issues – are about my dream ticket.
Also, one of the guys I debated with is running for US Senate here in TX, and he’s long winded bastard, so I’m suspending disbelief for him too.
23. February 2011 at 17:02
I expect most readers of this blog have already seen this post on Free Exchange:
http://www.economist.com/blogs/freeexchange/2011/02/monetary_policy_3
But if not, take a look.
I found the last sentence especially sad:
begin quote
And it’s interesting: even Mr Bernanke, student of the Great Depression and among the most aggressive and responsive of rich world central bankers, seems reluctant to follow the conclusions of the 1930s to their 2011 implications.
end quote
I agree with that. Bernanke knows what he should do – but the deflationist frenzy everywhere now evident has overtaken his power to do it. He needs support from Obama and that he does not have.
And anyone who has not read the Eichengreen paper linked to in the post should most certainly read it.
23. February 2011 at 17:06
Its odd – Obama always seems to have something else to do. For a while it was health care. Now it is a bit of this and a bit of that. The focus on employment just never actually happens.
23. February 2011 at 17:11
Like to hear your commentary on this new article by Prof Nicholas Crafts on “An historical perspective on the Great Recession”
http://www.voxeu.org/index.php?q=node/6146
23. February 2011 at 17:23
Manny
My comment is that the paper assumes the crisis to be nicely over with. That hardly seems to be the case. It is moving from finance to politics and getting more dangerous. And I think the deflationists are ahead in the debate.
23. February 2011 at 17:46
ratatoskr, Thanks for the info. That policy has probably worked out well for them, except in 2008 a devaluation would certainly have been helpful.
Benjamin, I suppose you are right.
Morgan, We shouldn’t “print money” we should set a price level or NGDP target.
You said;
“And we can finally have a true bipartisan policy led by the Tea Party.”
I’m sure Krugman and DeLong will gladly line up behind the Tea Party for a bipartisan attack on big gov.
Alan, Whenever I say “AD” I mean shift in the AD curve.
Yes, it’s inconsistent with the fiscal theory, although I don’t use that theory.
Richard, Thanks for that info. I never realized the Swedes were so nonconformist.
Dustin. Exactly, the difference is the growth rate of NGDP. The 70s were the fastest NGDP growth of my lifetime, the last several years have been the slowest. Total opposites.
David, Slowing growth (if it occurs), will probably bring lower yields. NGDP growth drives the T-bond market, not inflation. Yesterday bond yields fell sharply, which is exactly the opposite of what the inflation worriers predict.
Morgan, You said;
“Scott doesn’t really let everyone know what he’d have done in 2004-2006, so 2008 didn’t happen.”
I avoid irrelevant topics. 2008 happened because of what the Fed did in 2008, it’s as simple as that.
23. February 2011 at 17:59
JimP, Yes, that was a really good article by Avent.
It’s shocking that Obama has put so little effort into creating jobs. Yes, the GOP won’t allow anymore stimulus, but there’s lots of other things Obama could do, it just doesn’t seem like he focused on that issue–or else maybe his advisers are telling him there is nothing more he can do.
Manny, At first glance I’d say he focuses on the financial issues. Those are important, but I think he underestimates the importance of bad monetary policy, which let NGDP fall sharply.
23. February 2011 at 18:29
Scott,
There’s no doubt in my mind that the title of your current post is a truism. Keeping the economy near capacity (a main functon of monetary policy) means fiscal policy can focus on cost benefit analysis and thus be more efficient.
P.S. The Denmark vs Sweden contrast is very appropriate since they are very similar linguistically, culturally etc. Sweden has a floating currency and Denmark has a peg. One has one well, one has not. Go figure.
P.P.S. Today was a very bad day for me personally, especially after I finished grading my exams. But, as Scarlett said, tomorrow is another day.
23. February 2011 at 18:30
Scott, this is not logical…
“I avoid irrelevant topics. 2008 happened because of what the Fed did in 2008, it’s as simple as that.”
1. At minimum you plop down your sliderule and say well in 2004 NGDP was X, and 2005 is was Y.
2. I know you want to just focus on the sugar part, but I think we can now say conclusively that glancing towards political realities are part of economic advice… we can’t say Fiscal is politically impossible without admitting there are better and worse ties to do Monetary.
And then it just plain smart to start slowing down growth in the mid aughts, when it was more politically feasible – we had a nice big war going on.
23. February 2011 at 20:12
ssumner:
“Any conservative who favors neoliberal policy reforms should pray for faster NGDP growth…”
That is, I believe, exactly what they are doing. It’s their primary economic strategy.
“Let’s hope the Fed reacts appropriately, and doesn’t repeat its tragic error of September 2008.”
Relatively few people focus on just how counterproductive that was in a _supply side_ sense. When oil dropped to 30 dollars a barrel, how many energy efficiency upgrades were delayed? How many investments in non-oil energy recovery assets were delayed? We bought 2 years of cheap oil at the cost of +4% unemployment for 8 years and 2 years more dependency on the likes of Libya.
To what degree were the home energy efficiency tax credits a half hearted attempt to counter the effects of poor monetary policy on energy investment incentives?
23. February 2011 at 20:35
“Good monetary policies produce bad monetary policies”… how incredible Minkowskian
23. February 2011 at 21:37
Good news Scott, Goldman is calling for enough QE to produce 2% more NGDP!
http://blogs.abcnews.com/thenote/2011/02/goldman-sachs-house-spending-cuts-will-hurt-economic-growth.html
Get busy there Scott, the GOP needs you waiting in the wings. Just in case.
23. February 2011 at 21:49
Scott,
Unlike Denmark that negotiated an exceptional status under the Treaty of Maastricht (which limits its FX flexibility), Sweden is formally committed to introduce the Euro. But because of overwhelming opposition against EMU membership (referendum 2003 rejection by appr 60%) it is convenient for Sweden to not be in the ERM II because then they will not comply with the admission convergence criteria. The past four years have not contributed to the chances that Sweden will change..How long this can go on is the question, but probably there are greater worries in Brussels and Frankfurt right now.
Your remark about Danish (and the Dutch are doing exactly the same) austerity budgets (in Keynesianist terms) is interesting. It is well established that both countries have such a high level of openness that high levels of fiscal stimulus will, via consumption, “leak away” and not affect unemployment, which has a generally high structural component (although it might stimulate demand for holidays in Greece, but that is not a domestic priority).So already for decades, it is accepted wisdom that fiscal policy is for propaganda purposes only. Monetary policy (shadowing the DM, later the EUR, and keeping the EUR lean) was much more important, combined with targeted spending on the supply side (infrastructure, education, childcare, productivity oriented health care, etc). Given also that there is lively public debate in Germany and the Nordics about sustainability of the welfare state AND that in Holland and most of the Nordics large minorities have become disproportionally powerful in the hands of populist politicians who attract relatively old audiences, highly motivated to defend welfare for the elderly, long term debt reduction is now a worthy cause. Not tax reduction (only the “rich” pay income tax, the rest pays tax mainly as VAY and at the gas station) is not as relevant as in the US. In essence, a form of trying to shirk the burden of association with other countries. Covert free riding, the only skill a national politician in Europe needs..
23. February 2011 at 23:11
Rien Huizer,
It’s not surprising that the Swedes should be so reluctant to join the Euro or any fixed exchange rate system. Like Britain, their experience of the ERM I was not exactly successful; in fact, it was worse than Britain: even on Black Wednesday, the British bank rate never even reached three figures.
24. February 2011 at 06:28
Scott:
“That policy has probably worked out well for them, except in 2008 a devaluation would certainly have been helpful.”
given the PM’s predisposition toward euro membership — against the wishes of the population, i might add — it is unlikely the govt would choose to devalue.
24. February 2011 at 11:02
Yesterday bond yields fell sharply, which is exactly the opposite of what the inflation worriers predict.
I think lower yields means higher interest rates and, in fact, recent falling yields resulted in higher rates at the recent auction. Aren’t higher interest rates predicted by inflation worriers because easy money policy of the past months has started to create inflation?
24. February 2011 at 17:26
Mark, Sorry you had a bad day.
Morgan, You are probably right about 2005 but I see it as a distraction. It wasn’t the big problem.
Statsguy, I though most conservatives opposed more NGDP growth.
I agree about energy, but our main problem is that carbon taxes are not politically feasible, and nothing else actually works.
Doc Merlin, Who is Minkowski?
Morgan, I don’t think fiscal cuts would have much effect on growth, the Fed would probably mostly offset the impact.
Rein, Thanks for that info, it’s pretty much what I would have assumed for small open economies.
mmj, Thanks for the info.
Bababooey, I don’t follow–lower yields mean lower interest rates.
24. February 2011 at 17:42
“Morgan, I don’t think fiscal cuts would have much effect on growth, the Fed would probably mostly offset the impact.”
Scott, that’s why you should lead the charge against Goldman.
Be the anti-Fiscal guy who has a back up plan, just in case.
24. February 2011 at 20:01
“Doc Merlin, Who is Minkowski?”
A horrible butchering of Hyman Minsky’s name by a bad typist, (in this case me).
24. February 2011 at 20:11
Doc,
To merit an “ow” in Slavic culture your family has had to have accomplished something measurable. One syllable names=lower class (eg Bok). Two syllable names=middle class (eg Minski). Three syllable names=upper class (eg Sadowski). Four syllable names=priceless (eg RadziwiÅ‚Å‚) (Yes, it is four syllables. How do you pronounce it?).
24. February 2011 at 21:11
Let me clarify further. Caroline Lee Bouvier, sister of Jacqueline Lee Bouvier who married Jack Kennedy, and later Aristotle Onassis, was the husband of Albrecht Radziwiłł. Needless to say my family has spent our lives in the service of such people. But we rarely get to share the air that they breath.
http://en.wikipedia.org/wiki/Stanis%C5%82aw_Albrecht_Radziwi%C5%82%C5%82
25. February 2011 at 09:43
Bababooey, I don’t follow-lower yields mean lower interest rates.
This is why I read but never comment on the monetary posts, I’m an idiot. Traders use “yield” as either YTM or to identify an issue by reference to the stated rate (e.g., “how do you like the 9 3/8 at 92?” (YTM on that is higher than 9 3/8)). But hedge fund operators who get paid on mark to market, and have client trunover, often use “yield” interchangeably with “price” (i.e., the client’s yield on mark to market basically works off the price and a tiny bit of accrued interest). That’s how I read your use of “yield”, as price, which does move inversely to rates.
Sorry.
25. February 2011 at 10:23
That Sweden didn’t join the EU until 1995 and stays out of the ERM is purely for jingoistic reasons.
Sweden has always been extremely protective of its welfare system, welfare state. Has always assumed the Swedish welfare system is the best in the world (albeit delusional, it might have been true up until the mid 70’s).
Swede’s have been extremely suspicions of the EU of whom many, especially the SocialDemocrats and Labor Unions, saw as a Trojan horse for Catholicism and southern European values. They were seen as wastrels, profligates and shady characters not to have any say over Swedish social policies (The behavior of the PIGS in general and Greece in particular is an example of the fears held by Swedish politicians especially SocialDemocrats, they held power for nearly 80 years.)
The refusal to join the EU and later the ERM is as I written above not in my opinion based on any particular policy considerations. I might seem strange that the seemingly rational Swedes uses gut feeling on such an important issue but that’s because most of you guys have forgotten Swedes warlike past and its particular puritanical variant of Lutheran faith. The Swedish king Gustavus Adolphus was not for nothing called the Lion of Luther, the Swede’s were Europe’s mercenaries during the 100 year of religious wars. The armies were commanded by Swedes and the enlisted men were mainly Scots. For a foreigner its extremely strange that such a neutral country and seemingly peace loving population most revere the kings that in fact were warlords and butchers, Charles XII (according to historians he was the closest to conquer Russia) and Gustavus Adolphus (Gustav II Adolf).
I was born in Sweden but my parents were not Swedish i.e. I can as a semi outsider see quirks Swedes themselves have difficult seeing. I now live in the US and find it very amusing when I tell my US friends about Sweden as it is, not as their romantic view is on the left or the socialistic atheist horror view of the right.
Swede’s are extremely moralistic, judgmental and its based on their Lutheran heritage.
Swede’s are not peace loving. The defense will among young Swedes have always been higher than in the US, in fact for most of the cold war the only country with a higher defense will was Israel.
Sweden is not socialist in fact it is the most neo-liberal country in old EU 15.
Sweden also has one of the worlds highest wealth inequality GINI, much higher than the US.
The only thing that is true about Sweden is the high taxes and the large government spending. However it is also a chimera since most of the taxes 80 % goes back to the individual i.e. the Swedish high taxes are a forced savings plan, the Swedish state is in effect nothing but a large insurance company.
As a result Sweden has the worlds most regressive tax system, the poor pay a much larger portion of their income in tax than the rich. The US on the other hand has the worlds most redistributive and progressive tax system.
25. February 2011 at 11:39
“As a result Sweden has the worlds most regressive tax system, the poor pay a much larger portion of their income in tax than the rich. The US on the other hand has the worlds most redistributive and progressive tax system.”
This is why our federal tax system tends to cap out at about 19% of GDP and theirs much higher. Progressive tax systems are bad at generating revenue, because tax elasticity increases with income. If what you care about is generating revenue, you want to tax the most inelastic thing that you can.
26. February 2011 at 11:09
Morgan, That’s what I’m doing.
Bababooey, No problem.
Old Whig, Lots of interesting observations. You said:
“Sweden is not socialist in fact it is the most neo-liberal country in old EU 15.”
Close, I’d say Denmark is the most neoliberal, but I could be wrong. Is it easy to fire workers in Sweden?
You said:
“Sweden also has one of the worlds highest wealth inequality GINI, much higher than the US.”
Do you have any links to support this. I recall one of the world’s wealthiest people is Swedish, but would like to see overall data.
Thanks for all that information, it was a fascinating read. I am 1/8 Swedish.
Doc Merlin, Yes, that’s a point many liberals don’t realize.
28. February 2011 at 07:59
Scott,
I was slightly over enthusiastic. I should have written one of the most neo-liberal. In certain areas Denmark is more especially when it comes to labor relations and small business. In other instances such as the semi privatized and fully funded Social Security system and school vouchers Sweden is more neo-liberal. However because of the extensive welfare states high taxes and high government spending is locked in.
The facts about wealth GINI comes from the Luxembourg Wealth study 2006 and its working papers, I think a new one was made 2010. See link to paper.
http://www.lisproject.org/lws/introduction/finalconf/01.1%20Sierminska_Brandolini_Smeeding.pdf
A seminar when the paper was presented.
The Luxembourg Wealth Study: Enhancing Comparative Research on Household Finance, Banca d’Italia, Roma, 5-7 July 2007
http://www.lisproject.org/lws/introduction/finalconf/finalconfprogramme.htm
The information on the regressiveness of the Swedish, Danish and German tax systems comes from the “Luxembourg Income study” working papers “Taxation and the worlds of welfare” by Monica Prasad and Yingying Deng
http://www.lisproject.org/publications/liswps/480.pdf
1. March 2011 at 06:40
Old Whig, Thanks for that data. The wealth data is perplexing. The US has much more wealth in the top 1%, top 5% and top 10%, but Sweden has a worse Gini.