Trouble ahead for Sweden? It’s aiming for a balanced budget.

Looks like Sweden is aiming for a balanced budget (hat tip to Marc Robinson).

As I’ve pointed out more than once on this blog, any country which aims for inflation of around 2% will need to run a significant deficit just to prevent its monetary base and national debt declining relative to GDP at 2% a year. If it doesn’t have that deficit, private sector saving desires may not be met, which may mean paradox of thrift unemployment.

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