Labour supply elasticity may hamper wage growth – Riksbank’s Ohlsson
As economic demand rises it can be satisfied by a higher number of workers
Greater flexibility in the Swedish labour market may be one of the factors preventing higher wage growth, despite lower unemployment, said Riksbank’s deputy governor Henry Ohlsson in a speech on May 29.
Ohlsson points out how the Phillips curve theory, which says lower unemployment should coincide with higher inflation, is failing to materialise in the country.
“If we look at developments since 2011 in particular, there does not appear to be a correlation – the Phillips correlation seems to be
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