Mid Sweden University

The increased knowledge that there exists connections between entry rates into entrepreneurship and the business cycle creates room for economic policy, to moderate the effects of the business cycle, and also influence the entry rates. In addition, increased structural transformation in the economy also creates room for new economic activities. The knowledge-intensive manufacturing industry in Sweden has in relative size been reduced. Measures to counteract this development is to increase innovations, patents, and new business formation. Thus, the challenge is to create room for an increasing support of the entry of entrepreneurship by economic policy.

EMU systemets förmåga att klara ekonomiska påfrestningar har blivit kraftigt ifrågasatt i

samband med den ekonomiska finanskrisen. Dessutom har konkurrenskraften i ett antal

länder inom Eurozonen inte utvecklats i önskad riktning. EMU systemets omfattning och

dess grundläggande ekonomiska konstruktion måste åter diskuteras. Ekonomiskt strukturella

olikheter måste kompenseras via ökad integration för att stärka konkurrenskraft och stabilitet.

Detta är genomförbart, men endast för ett mindre antal ekonomiskt robusta EMU-länder

inom den europeiska unionen.

The capacity of the EMU system to successfully tackle an economic crisis has been questioned during the recent financial and economic turmoil. The basic economic structure and competitiveness in the eurozone has developed in an undesirable direction. The number of member countries of the EMU, as well as the basic construction of the EMU system, must again be the focus of the discussion. After a study of the current accounts of 12 EMU countries follows a discussion in terms of the Barro–Gordon model about the costs of the EMU, i.e., to bring together the preferences of the political authorities in different EMU countries and the optimal combination of inflation and employment in the eurozone to determine the sought equilibrium of the model. If economic structural differences are increasing, they must be compensated by increased integration. It is feasible, but only for the economically viable EMU countries.

In this paper we focus on production chains, i.e., on intermediate commodities, in Swedish manufacturing. Based on input output data for the two years 2000 and 2005, we investigate the input change of the intermediate import shares. The result is that the share of intermediate imports has increased in important sectors. The conclusion is that the globalisation process has affected the production system in the Swedish economy. Finally the problem of adjustment and economic strategy are discussed.

The long term balance between fiscal efforts of stabilisation and necessary growth to obtain full capacity is the issue must be the focus of the discussion of economic policy by the countries in the Eurozone. Labour market reforms to create flexibility is important, and necessary, but not sufficient. To make labour market reforms feasible they must also be supported by short run measures to create flexibility in economic policy to stabilize demand on a steady state growth path. By the help of an elementary economic transformation model, it is possible to show that fiscal efforts of stabilisation in the Eurozone can be a threat against economic transformation itself, and hence, growth.