His most significant contributions concern wage formation, trade unions, and collective bargaining, as well as the effects of labor market policies.
The most notable contribution is the formulation of the Calmfors-Driffill hypothesis in 1988 in an article co-authored with the British economist John Driffill.
In uncoordinated sector-level bargaining, neither competitive pressure nor the internalisation effects are strong enough to promote wage moderation.
Calmfors served as the chair of the Economic Council in Sweden, a scientific advisory group to the Swedish Ministry of Finance, from 1993 to 2001.
Calmfors chaired the Government Commission on the EMU (the Calmfors Commission), which in 1996 recommended that the Swedish government and the Swedish parliament postpone the introduction of the euro until the economic problems of high unemployment and weak public finances following the 1990s crisis were resolved.
Calmfors and the council criticsed the center-right government's fiscal policy during the global financial crisis of 2008–2010 for being too contractionary, leading to a conflict with the Minister for Finance, Anders Borg.
The council's reports proposed, among other things, new types of low-skilled jobs with low minimum wages and reforms of the current Swedish systemof pattern bargaining, under which the manufacturing sector Calmfors has held several international assignments, including for the European Economic Advisory Group, EEAG, at the CESifo institute (member 2003–2008 and 2011–2012, chair 2006–2008), the European Commission, the European Parliament, the OECD, the Nordic Council of Ministers, and the governments of Finland, Norway, and the United Kingdom.