Financial expansion in Sweden (2000–2008): A hybrid “debt&export-led” growth model

Abstract

In the literature on financialized growth, two models are often presented as complementary but opposing: some countries drive their domestic demand through debt, while others grow on the basis of exports. In this research, we identify Sweden as a country that in the midst of the financial euphoria preceding 2008 combined these two models simultaneously. By identifying this “debt&export-led” growth model, we add richness and taxonomic complexity to the literature on financialized growth models. That said, this research contributes especially to the debate on the Swedish growth model, revealing a “hybrid” model that resulted from the interaction of two sets of factors: i) the presence of a successful exports sector, driven by a commensurate regulatory framework in a context of strong international demand; and ii) the manner in which financialization operated in Sweden, through a historic increase in private debt levels simultaneous with a partial dismantling of the welfare state.