officially a neutral country and remained outside NATO or Warsaw pact membership during the cold war, but privately Sweden's leadership had strong ties with the United States and other western governments.
Following the war, Sweden took advantage of an intact industrial base, social stability and its natural resources to expand its industry to supply the rebuilding of Europe. Sweden was part of the Marshall Plan and participated in the Organization of Economic Co-operation and Development (OECD). During most of the post-war era, the country was governed by the Swedish Social Democratic Party largely in cooperation with trade unions and industry. The government actively pursued an internationally competitive manufacturing sector of primarily large corporations.
Sweden, like countries around the globe, entered a period of economic decline and upheaval following the oil embargoes of 1973–74 and 1978–79. In the 1980s pillars of Swedish industry were massively restructured. Shipbuilding was discontinued, wood pulp was integrated into modernized paper production, the steel industry was concentrated and specialized, and mechanical engineering was robotized.
Between 1970 and 1990 the overall tax burden rose by over 10%, and the growth was low compared to other countries in Western Europe. Eventually government began to spend over half of the country's gross domestic product. Sweden GDP per capita ranking declined during this time.
Recent history
A bursting real estate bubble caused by inadequate controls on lending combined with an international recession and a policy switch from anti-unemployment policies to anti-inflationary policies resulted in a fiscal crisis in the early 1990s. Sweden's GDP declined by around 5%. In 1992, a run on the currency caused the central bank to briefly increase interest rates to 500%.
The response of the government was to cut spending and institute a multitude of reforms to improve Sweden's
