What factors explain Sweden's stronger economic growth in comparison to Finland after the financial crisis n 2008?
School of Business | Bachelor's thesis
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AbstractSweden’s seemingly faster recovery from the recession sparked by the global financial crisis in 2008 in comparison to Finland has been a hot topic in public discussion during recent years. It has been apparent that there exist some serious issues behind Finland’s inability to catch up on growth after the hit in 2008. By gathering data and analysing various factors affecting the development of gross domestic product (GDP) with the help of existing literature, I aim to examine where the differences related to growth rates stem from. Finland and Sweden, in addition to being small, open economies, also share other similar traits regarding their economic activity and national policies in general, which I find to enable this sort of cross-country analysis. Significant differences are found in contributions of capital and labor for Sweden’s advantage considering the Solow method of growth accounting. Finland also trails Sweden when it comes to exports and investments development, as these are found to be vital sources of economic growth. Ultimately, Sweden has managed to lift its labor productivity rate throughout the last decade, whereas there exists almost no development in this aspect for Finland.
Thesis advisorPohjola, Matti
gross domestic product, growth accounting, components of GDP, productivity