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.
Return to Timeline