of the decline in employment measured varies from one source of statistics to another, the overall picture is still clear ; employment has been weaker than anticipated, while economic growth has been stronger. this phenomenon is known as jobless growth, or jobless recovery. the parallels to the recent developments in sweden are obvious ( figure 4 ). despite the increasingly clear signals of stronger economic activity, growth in the labour market is very slow, particularly in the business sector. productivity growth is tangible in both the united states and sweden, while many countries in europe are still struggling with a relatively weak growth. however, one important difference in the comparison between the united states and sweden is that both the rate of growth and the increase have been much more dramatic in the united states. the same applies to the size of the decline in employment, which has been much more significant in the united states. this means that comparisons between sweden and the united states should be interpreted with caution. 4. productivity in the economy as a whole percentage 12 - month change 5. 0 5. 0 productivity 4. 5 average 1981 - 1990 4. 5 4. 0 average 1991 - 2002 4. 0 3. 5 3. 5 3. 0 3. 0 2. 5 2. 5 2. 0 2. 0 1. 5 1. 5 1. 0 1. 0 0. 5 0. 5 0. 0 0. 0 - 0. 5 - 0. 5 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 source : statistics sweden there is reason to reflect over the explanations that might lie behind a productivity increase of a more fundamental nature, similar to that we have seen in the united states in recent years. personally, i have found it helpful to use the events of the late 1990s as a starting point ; a period when productivity was also surprisingly strong. the driving force behind this development is usually said to be technological progress in information and communications technology, which led to productivity increases in the it - producing industry and price falls on it products. in addition, there was extensive investment in it capital in other industries, also stimulated by favourable price developments, which resulted in higher productivity outside of the it sector. expressed in a different way, productivity growth at this stage was said to be driven by increases in total factor productivity within the it - producing industry and by an increased it capital intensity in other sectors of the economy. some analysts have pointed to the possibility that the recent productivity increase could be at least partly due to it capital now making an

itself is lower than it was in 2003, although the cyclically adjusted deficit is close to 4 percent – higher than it was in 2003. since 2007, when the actual deficit was almost zero, the deficit has grown during the crisis, declined somewhat in 2010, and since then has not declined. the result is that we have a deficit of about 4 percent in a situation of almost full employment. i feel very uneasy with this kind of deficit in the current situation, since if the economy enters a recession – a scenario which we must take into account – the deficit will grow, and it will be harder to deal with it. the debt - to - gdp ratio declined from a level of almost 300 percent of gdp prior to the stabilization plan, climbed slightly to a level of about 100 percent during the recession at the beginning of the 2000s, and continued to decline since then to a level of 74 percent today. compared to other countries, we have greatly improved in this parameter due to an increase in the debt levels of many countries as a result of the crisis, but it is very important for the state of israel that the debt to gdp ratio be low. we are exposed much more than other countries to geopolitical risks, and if god forbid we find ourselves one day in a conflict with our neighbors, near or far, it is important that we not come into it with this kind of debt ratio. it is very important, therefore, to continue reducing the debt to gdp ratio. in 2012, the government adjusted the deficit path such that the deficit targets would be reduced more slowly than planned beforehand. in practice, if we grow at an average rate of bis central bankers ’ speeches 3. 75 percent per year, the deficit will decline even more slowly than the path decided upon by the government, based on the existing tax rates in the existing legislation – that is, even taking into account the increase in the vat and direct tax rates recently enacted. according to this estimation by the bank of israel, the deficit in the coming year will apparently be 3. 5 percent, and will reach a level of 2 percent only in the year 2020. according to this projection, debt will also decline more slowly than the government estimated when setting the legislation. the fiscal rule which guides our actions is the result of a joint effort by the ministry of finance, the prime minister ’ s office, and the bank of israel. it is a relatively simple rule that can be easily explained to the public. we know that the expenses