The Secret to Sweden's Success: Currency Debasement

A blog about business and economics.
May 15 2012 4:16 PM

The Secret to Sweden's Success: Currency Debasement

Queen Silvia of Sweden and King Carl XVI Gustaf of Sweden
Queen Silvia of Sweden and King Carl XVI Gustaf of Sweden

Photograph by Ragnar Singsaas/Getty Images.

In an interview with Ezra Klein, Sen. Tom Coburn of Oklahoma is too sophisticated to argue that massive immediate fiscal retrenchment is needed to avoid a national default or bankruptcy. Instead he worries that massive immediate fiscal retrenchment is needed to prevent a collapse in the value of the dollar. He argues that Japan is due for such a currency crisis very soon and that the United States will follow. He warns darkly of money-printing and inflation. And he praises the approach of the center-right government of Sweden.

But guess how Sweden weathered the crisis? That's right, massive currency devaluation:


And good for them! But this just goes to show how confused Coburn is. When you're talking about a depressed economy that has a lot of idle resources—unemployed workers, vacant office and retail space, factories running below capacity, cranes going unused—then a currency depreciation helps reactivate the idle resources and generate a higher level of real output.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



Don’t Worry, Obama Isn’t Sending U.S. Troops to Fight ISIS

But the next president might. 

IOS 8 Comes Out Today. Do Not Put It on Your iPhone 4S.

Why Greenland’s “Dark Snow” Should Worry You

How Much Should You Loathe NFL Commissioner Roger Goodell?

Here are the facts.

Three Talented Actresses in Three Terrible New Shows


The Human Need to Find Connections in Everything

It’s the source of creativity and delusions. It can harm us more than it helps us.


More Than Scottish Pride

Scotland’s referendum isn’t about nationalism. It’s about a system that failed, and a new generation looking to take a chance on itself. 

The Ungodly Horror of Having a Bug Crawl Into Your Ear and Scratch Away at Your Eardrum

We Could Fix Climate Change for Free. Now There’s Just One Thing Holding Us Back.

  News & Politics
Sept. 17 2014 7:03 PM Once Again, a Climate Policy Hearing Descends Into Absurdity
Business Insider
Sept. 17 2014 1:36 PM Nate Silver Versus Princeton Professor: Who Has the Right Models?
Sept. 17 2014 6:53 PM LGBTQ Luminaries Honored With MacArthur “Genius” Fellowships
  Double X
The XX Factor
Sept. 17 2014 6:14 PM Today in Gender Gaps: Biking
  Slate Plus
Slate Fare
Sept. 17 2014 9:37 AM Is Slate Too Liberal?  A members-only open thread.
Brow Beat
Sept. 17 2014 5:56 PM Watch Louis C.K., Dave Chappelle, Bill Hicks, Mitch Hedberg, and More on New YouTube Channel
Future Tense
Sept. 17 2014 7:23 PM MIT Researchers Are Using Smartphones to Interact With Other Screens
  Health & Science
Sept. 17 2014 4:49 PM Schooling the Supreme Court on Rap Music Is it art or a true threat of violence?
Sports Nut
Sept. 17 2014 3:51 PM NFL Jerk Watch: Roger Goodell How much should you loathe the pro football commissioner?