Sweden Economic Enviroment
Economic Environment
International Finance
Swedens economic environment is a relatively stable and prosperous one. The economy of Sweden, along with the policies, have allowed Sweden to have one of the highest standards of living in the world. It has a well developed economy that is based upon capitalism and extensive benefits. It is highly dependent on its foreign trade with its leading resources base being timber, iron ore and hydro power (the world factbook). Sweden also was able to emerge from the financial crisis as one of the strongest economies in Europe (background note: sweden).
In the last 150 years, Sweden has gone from being a nation that was undeveloped and poor to being one of the most wealthy and prosperous nations in the world. “Between 1850 and 1970 Sweden had the highest economic growth rate in the world, next to Japan, and became one of the wealthiest nations in the world in terms of GDP per capita (agricultural toward industrial).” An abundance of natural resources has helped Swedens economic development, along with the scrapping of the guild system in 1846. The guild system was a set of regulations and prohibitions on many economic activities. This hampered entrepreneurship in the country of Sweden.
Another sweeping change that helped move Sweden forward was the agricultural revolution which made farming much easier by the invention of new and easier farming methods. This agricultural revolution helped free up workers by using machinery and allowed these workers to move into other sectors. Shortly after this agricultural revolution began, the first industrial revolution was underway, which had much of its industry start up in the countryside due to only 10 percent of the population living in the cities. This first industrial revolution was the biggest jump toward being a prosperous nation. The next step towards prosperity was the spread of the free trade movement throughout Europe. Sweden was able to cash in on much of its natural resources by trading with other European countries. By 1900, Sweden was still a relatively poor nation but was growing and catching many of the other more wealthy nations. These revolutions and changes in Sweden had helped it to become a wealthy and prosperous nation (agricultural toward industrial).
Sweden has always been a country of neutrality and did not participate in either world wars. Because of this Sweden did not have a “war torn country” in need of rebuilding and in need of help. They were able to maintain and grow without the war setting them back. Sweden was able to increase production in many of its industries due to other nations shortages. “After World War 2, Sweden moved to the “Swedish model” which was the historical compromise between a social