Sweden's quick recovery was astonishing. By 1934, real output had recovered to 1929 levels. By 1935, it was 7 percent above it. Growth would continue well into World War II.

Sweden's success owed everything to its liberal government. In 1932, Labor returned to power. The Swedish Finance Minister was heavily influenced by a group of economists led by Gunnar Myrdal, who had been advocating Keynesian-like solutions for years. The Labor government promptly ran large deficits, and within two years had spent itself out of the Depression.

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