# Lars Calmfors

Lars Calmfors, born on July 12, 1948, in Stockholm is a Swedish economist and professor emeritus in international economics at the Institute for International Economic Studies at Stockholm University. He has been active there since 1974 (as a professor from 1988 to 2015, deputy director from 1988 to 1995, and director from 1995 to 1997). He is a researcher at the Research Institute of Industrial Economics, IFN, since 2015.

## Education

He received his Ph.D. from the Stockholm School of Economics in 1978.

## Career

Calmfors' research focuses on labour economics and macroeconomics. His most significant contributions concern wage formation, trade unions, and collective bargaining, as well as the effects of labor market policies. The most notable contribution is the formulation of the Calmfors-Driffill hypothesis in 1988 in an article co-authored with the British economist John Driffill. According to the hypothesis, there is a hump-shaped relationship between, on one hand, the degree of coordination of various collective agreements and, on the other hand, wage levels and unemployment. Both decentralised bargaining at the company level and coordinated bargaining at the national level can lead to wage restraint. In company-level agreements, competitive pressure on individual companies has a restraining effect, while in nationally coordinated agreements, the parties have strong incentives to consider the broader economic impact (to internalise externalities). In uncoordinated sector-level bargaining, neither competitive pressure nor the internalisation effects are strong enough to promote wage moderation. Sector-level bargaining therefore leads to higher wage levels (the "hump" in the relationship) than both decentralised and coordinated bargaining. This mechanism is stronger the less open an economy is to international competition. With greater openness, the hump becomes flatter.
Calmfors served as the chair of the Economic Council in Sweden, a scientific advisory group to the Swedish Ministry of Finance, from 1993 to 2001. During this time, he launched the journal Swedish Economic Policy Review, which was published by the councill until 2008. In 2009, the journal was transformed into the Nordic Economic Policy Review, published by the Nordic Council of Ministers. Calmfors was the chief editor of this journal from 2018 to 2020.
Calmfors chaired the Government Commission on the EMU (the Calmfors Commission), which in 1996 recommended that the Swedish government and the Swedish parliament postpone the introduction of the euro until the economic problems of high unemployment and weak public finances following the 1990s crisis were resolved. In the 2003 referendum on the introduction of the euro in Sweden, Calmfors advocated for joining but was critical of the pro-euro campaign, arguing that it exaggerated the economic benefits of euro membership .
He was a member of the committee for the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ("the Nobel Prize in economics") from 1996 to 1998 and from 2003 to 2007.
As an expert in the Government Commission on Labour Market Policy (SOU 1996:34), Calmfors proposed the establishment of an independent labour market policy evaluation authority to assess labour market policies in Sweden. Such an authority—IFAU, the Institute for Evaluation of Labour Market and Education Policy—was established in 1997. Calmfors served on its board from 1997 to 2004. In the early 2000s, he proposed the establishment of a Fiscal Policy Council in Sweden and became its first chair from 2007 to 2011. The council's task is to evaluate the government's economic policy. Calmfors and the council criticsed the center-right government's fiscal policy during the global financial crisis of 2008–2010 for being too contractionary, leading to a conflict with the Minister for Finance, Anders Borg.
From 2015 to 2018, Calmfors chaired the Swedish Labour Policy Council, an independent expert group established by the Confederation of Swedish Enterprise to analyze the functioning of the labour market. The council's reports proposed, among other things, new types of low-skilled jobs with low minimum wages and reforms of the current Swedish systemof pattern bargaining, under which the manufacturing sector
Calmfors has held several international assignments, including for the European Economic Advisory Group, EEAG, at the CESifo institute (member 2003–2008 and 2011–2012, chair 2006–2008), the European Commission, the European Parliament, the OECD, the Nordic Council of Ministers, and the governments of Finland, Norway, and the United Kingdom.
Calmfors has been a member of the Royal Swedish Academy of Engineering Sciences since 1993 and the Royal Swedish Academy of Sciences since 1995, He was a member of the board of the Royal Swedish Academy of Sciences from 2001 to 2007 and of the board of the Swedish Research Council from 2007 to 2012. From 2001 to 2009, he was chair of the scientific council of SNS, a leading Swedish think tank.
Calmfors has been an active participant in the Swedish economic policy debate. Since 2011, he has written regular columns on economic and other topics in the morning daily Dagens Nyheter. Since 2020, he has been a member of the Minister for Finance's Economic Council and since 2023, a member of the Minister for Employment's Labor Market Policy Council and the Swedish Public Employment Service's scientific council. Since 2022, he has been the chair of the scientific council of the think tank Fores.