proposals – many of them were controversial, which stimulated the debate of the day. the lindbeck commission took the view that the crisis was based on problems in three fundamental areas ; stability, efficiency and growth. the proposals were also grouped into measures to create stability, measures to increase efficiency in resource utilisation and measures to increase growth in the economy. price and budget stability has been attained if one reads this report today, one is struck by how many of these proposals have actually been implemented. when it comes to measures for attaining macroeconomic stability, most of them have been implemented and sweden has for several years enjoyed low inflation and sound public finances. progress has also been made in the field of wage formation. with regard to measures to increase efficiency and potential growth, the result of a survey of which proposals have been implemented gains more mixed results. important changes have been made in some areas ; while in others very little has happened. if we look at developments during the eight years that have passed since 1993, the results are heartening. the average growth rate during this period has amounted to 3. 1 per cent. this is very different from the average growth rate of 1. 8 per cent that prevailed during the previous ten years. if developments since 1993 had been limited to this 1. 8 per cent, we would currently have a gdp level around sek 174 billion lower than now, i. e. more than eight per cent lower, and the situation would have looked radically different in most areas. open unemployment would be twice as high if one " new terms for economics and politics ", proposals from the economics commission, sou 1993 : 16. utilises the " okun relation " - at approximately 8 per cent rather than roughly 4 per cent. it is doubtful, however whether the okun relation is relevant over such a long period of time. the greatest part of the difference would probably have resulted in lower real wages, i. e. our disposable incomes would have been substantially lower. it is possible to make many calculations of this nature, all of which illustrate how differences in the growth rate provide very strong effects over a number of years. there is therefore good reason to discuss which factors have contributed to this favourable development. it will probably not be possible to agree on a definitive answer, but i believe it is likely that the structural reforms implemented even before 1993 ( in particular the tax reform of 1990 / 91 ) and the proposals by the economics commission that were implemented have all

the capacity to renew regulatory frameworks and institutions to enable the country to embrace change is an important part of this openness. obstacles to ideas, goods, services and production factors moving freely across borders have declined during the 1990s, partly thanks to our membership of the eu, and it is reasonable to assume that this has had a positive effect on factor productivity. for a small country like sweden, internationalisation and increased international competition are expected to lead to particularly favourable productivity effects. various measures indicate a marked increase in the degree of internationalisation in the swedish economy. both the import share and the export share have risen, which means that trade and the degree of specialisation have increased. moreover, foreign direct investment in sweden has multiplied and it is mainly direct investment from eu countries that has increased. although the increasing international openness has been pronounced in sweden with, for instance, a rise of 13 percentage points in the export share of gdp during the 1990s, there are several smaller countries that have shown an even more rapid increase in the equivalent figures. this reflects the globalised world in which we live, and does not reduce the significance of openness for the development of factor productivity. internationalisation has thus contributed to ensuring that an increasing percentage of trade and industry is exposed to competition. increased competition means that companies must become more efficient and cost - conscious, which in turn should have a positive effect on productivity. in addition, a new competition act came into force in sweden in 1993, containing an expressed prohibition of co - operation between companies that limits competition, as well as a ban on the misuse of a dominant position. there has also been deregulation in a number of areas. for instance, government monopolies have been abolished and freedom to establish businesses has been introduced with regard to, for instance, transport, communication and energy. changed conditions for competition thus affect productivity growth, but they can also affect price trends in a more direct manner. despite the fact that we gained much tougher competition legislation in 1993, it appears that developments in this field are moving rather slowly. swedish prices continue to lie at a higher level than those in other countries in most areas, without this being fully explained by differences in vat rates and wages. increased competition could contribute to a convergence of price levels. high food prices swedish food prices were, for instance, more than 18 per cent higher than the average prices in the eu in 1998. the difference has declined somewhat since then, but apparently at a very slow rate.