Economic history of Sweden

It fostered a broad export-oriented engineering industry with companies such as LM Ericsson, Asea, Alfa Laval, Aga, Electrolux, SKF and Volvo reaching well established positions on the global market and becoming drivers of GDP growth.

When King Charles XII died in 1718, the Riksdag of the Estates were convinced that it was the system of absolute monarchy, which reduced their power, that had brought the downfall of the country.

However, by the time the Age of Liberty ended in 1772 (as a result of a self-coup by King Gustav III), Sweden was by all objective measures a weaker nation than it was during its "Era of Great Power".

[3] This decline can be attributed both to fiscal, monetary and executive policy errors by the various Riksdag parties in power, as well as to technological and economic shifts which allowed Sweden's rivals and neighbours get ahead on the global stage.

The early division of labor resulted in household handicraft being largely restricted to the region's natural geographic resource.

Several important institutional changes took place in this period, such as free and mandatory public schooling introduced 1842 (as the first country in the world), the abolishment of a previous national monopoly on trade in handicrafts - the skråväsendet - in 1846, and a stock company law in 1848.

During the period 1850-1890 Sweden witnessed a veritable explosion in its export sector, with agricultural crops, wood and steel being the three dominating categories.

Having imported vast amounts of foreign capital to finance its industrialization, during a 60-year period, from 1850 to 1910, Sweden was probably one of the leading debtor nations in the world by 1910.

In 1914 the First World War commenced and international demand for Swedish exports of strategically important products such as steel, to be used in the armaments industry, increased rapidly.

The warring nations had imposed severe limitations on trade between each other, as a neutral country, Sweden suffered indirectly from scarcity of commodities.