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A number of comparative studies of economic and social performance have ranked the Nordics high. A common finding of cross-country comparisons is that the Nordics succeed better than other countries in combining economic efficiency and growth with a peaceful labour market, a fair distribution of income and social cohesion. The model is pointed to as a source of inspiration for other people in their search for a better social and economic system. On the other hand, many observers around the world are amazed that “the bumble-bee can fly” – that the Nordic economies can prosper and grow in spite of the presumably weak economic incentives associated with high tax wedges, a generous social security system and an egalitarian distribution of income. Critics have been looking for inner contradictions in the model and they have questioned its sustainability. Some argue that the economic performance of the Nordic countries is simply a result of exceptional and temporary advantages, bound to disappear over time. This report deals with the Nordic model, the reasons why it has worked in the past, and the challenges it is being subjected to in the future. Present economic and social trends, including globalization and demographic change, pose significant challenges to the model as we know it. The model will remain viable and successful only if the challenges and the need for reform are understood – and if action is taken. THE NORDIC MODEL Embracing globalization and sharing risks Torben M. Andersen, Bengt Holmström, Seppo Honkapohja, Sixten Korkman, Hans Tson Söderström, Juhana Vartiainen
https://economics.mit.edu/files/5726
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https://economics.mit.edu/files/5726
Mod Edit: Supplying a link to the textual material that may be subject to copyright. Contact moderation if it's not correct. BILLSANDS New members may and should post links for copyright after they reach their qualifying post limit.
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