Another principle component of the Swedish model is that the Stockholm economists used it to direct their interests to disequilibrium economics and cyclical instability. These economists did not have any concern as to why the country's economy could be caught up in an underemployment equilibrium and stagnation. The main concern of the economists was how they could bring the economy of the country out of the crisis or depression, which would thereby result in a reduction of the unemployment rate in the country (Woolfson, Thörnqvist and Sommers, 2010). Their emphasis was the possibilities of expanding the economy. The economists discussed the risk of having an inflationary boom, pointing out that the inflation might make the economy experience a new depression.
The Stockholm version pronounced the policy orientation of theory more than it was pronounced in the General Theory. The pronunciation of the policy issues happened in 1931 after the crown was devalued, which presented the famous economists such as Myrdal and Eli Heckscher with an opportunity to present their opinion about the policy requirements. The Swedish model relied partially on the Social Democratic Government, which was open and receptive to the expansion arguments policies made by the economists (Lundberg, 1985). The policy theory orientation emphasized in having a passive nature of saving, where underutilization of resources and elastic supply of money would give people an investment opportunity. The policy debate held in the 1930s paid less concern about the risks that inflation was likely to bring. However, there was an apprehension caused by impulses of the international price.
The last principle feature of the Swedish model of industrial and economic relations is that it refers to how the international relations are treated. The Stockholm economists believed that the policy model should refer to small but open economy.
