From the first to the second world war

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.

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