During rapid economic expansion, problems with bottlenecks may occur temporarily because new production facilities are not always available just when they are needed to cope with increased demand. Experience in the 1990s suggests, however, that firms have become more flexible, both in the utilisation of existing capital stocks and in the procurement of new technology, machinery and plant when demand rises. This suggests that, if anything, it is not the level of unutilised capital resources that is critical at present. Instead, an analysis of resource utilisation should probably focus on the labour market. Another reason for this is that in a price analysis at macro level, the weightiest item in costs is wages; total wage costs are equivalent to over two-thirds of GDP. The level of unemployment has been reduced but remains high, particularly compared with the post-war period up to the early 1990s. Seen from that angle, some might say that the Swedish economy has plenty of unutilised resources. Experience from other European countries has taught us, however, that after a severe shock, as happened in the early 1990s, unemployment tends to stick at a high level, at least for a while. Estimates of the equilibrium level of unemployment in Sweden suggest that it moved up in the early 1990s and in terms of registered unemployment is somewhere in the interval 4.5 to 7.5%. Considering that the rate of registered unemployment is currently inside this interval, the estimates would suggest that the Swedish economy is now close to full capacity utilisation.

For example, individuals often make choices that provide immediate recognition or satisfaction—higher status within a peer group, for example—often at the cost of a potentially better financial outcome in the long term. This type of human behavior is at the core of the complexity of culture reform. Lessons from the field have increased understanding of where decision-making can depart from economic expectations. Sometimes, these lessons have been used to create circumstances and environments that positively influence individual outcomes by “nudging” individuals to better choices.11 These nudges, in turn, help reinforce acceptable behavioral norms, and ultimately a firm’s culture. How can we nudge in order to reduce misconduct risk? More broadly, how can the financial services sector, including firms and supervisors, leverage insights from the social sciences to promote environments that foster healthy group behavioral patterns with better decision-making? Technology The promise of new technology and big data for financial institutions is everywhere we look. 3/5  BIS central bankers' speeches  From artificial intelligence to machine learning to natural language processing, there seems to be unlimited potential for more efficient operations, better analytics and more accurate predictions, and more personalized product development. But, how will advances in technology, particularly the adoption of new technologies, such as artificial intelligence, influence the behavioral risks associated with human decision-making? And how does technology introduce new risks that prompt a rethinking of responsibility and customer relationships—especially with regard to privacy and information security?