During the First World War there was very high inflation, which was then succeeded by severe deflation at the beginning of the 1920s. The Riksbank experienced great difficulty in coping with the economic fluctuations. The situation improved for some years, only to deteriorate again when the Wall Street crash in 1929 was followed by the suspension of the gold standard. Ivar Kreuger committed suicide in 1932. Protectionism and an economic depression ensued. The protectionism involved using various methods to try to protect goods and services produced in Sweden from competition from other countries.
The crisis policy pursued in the 1930s paved the way for stronger coordination of fiscal policy and monetary policy, which in turn contributed to a calmer, more consistent approach to the economic strains of the Second World War.
Time axis
|
1914–18 |
FirstWorldWar.
|
| 1915–19 |
Rapid wartime inflation.
|
| 1920–20 |
Marked deflation.
|
| 1922–23 |
Bank crisis.
|
| 1924 |
Gold standard is reintroduced.
|
| 1929 |
Ivar Rooth is appointed governor of
the Riksbank. Wall Street crash.
|
| 1931 |
International financial crisis. Britain
abandons the gold standard, followed
by Sweden and other countries.
Monetary policy to aim for price
stability.
|
| 1931–32 |
Prime Minister Ekman persuades
the Riksbank to participate in two
loans to Ivar Kreuger’s financial
empire.
|
| 1932 |
Kreuger commits suicide.
The Riksdag adopts a monetary policy
programme for price stability.
|
| 1933 |
The Swedish krona is pegged to
sterling at 19.40 kronor to the pound.
|
| 1939 |
The krona is pegged instead to the
dollar at a rate of 4.20 kronor.
|
| 1939–45 |
SecondWorldWar.
|
| 1941 |
Dag Hammarskjöld, under-secretary
at the Finance Ministry, is appointed
chairman of the Riksbank’s
governing board.
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