After deep crises in the 1990s, the Nordic countries adjusted their models and recovered swiftly. They also weathered the Great Recession quite well. Both crises emanated from financial and economic policy failures, not from the social models. In the 1990s, currency depreciations and adjustments in economic policies, wage coordination, education, and activation policies helped reduce unemployment and keep inequality low. Hard-hit by the 2008–09 crises, the Nordics could—due to strong public finances and automatic stabilizers—pursue moderately countercyclical policies. In Sweden and Norway, initial depreciations also contributed to swift recoveries. The slump became more prolonged in Denmark—due to a bursting asset bubble—and in Finland, which was hit by structural crises in key export markets. Although recovery had taken hold in all the Nordic countries but Finland by early 2014, ageing, more heterogeneous populations, union decline, higher unemployment, and shifting political winds have increased uncertainty about the future Nordic path of social model adjustment.
European Social Models From Crisis to Crisis: Employment and Inequality in the Era of Monetary Integration Jon Erik Dølvik & Andrew Martin
Dølvik, J. E., Andersen, J. G., & Vartiainen, J. (2014). The Nordic social models in turbulent times. In European Social Models From Crisis to Crisis: Employment and Inequality in the Era of Monetary Integration, Oxford University Press eBooks (pp. 246–286). https://doi.org/10.1093/acprof:oso/9780198717966.003.0008
