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The Rehn–Meidner Model is an economic model developed in 1951 by two economists of the research department of the Swedish Trade Union Confederation (LO), Gösta Rehn and Rudolf Meidner. They developed this overall economic model, which is based on the interaction of a strict fiscal discipline, a solidarity wage and to a forced active labor policy. The Rehn-Meidner Model was built on four main goals for the economic politics:

  1. Low inflation
  2. Low unemployment
  3. High growth
  4. Equal incomes

Unprofitable enterprises from the market were to be pushed toward the solidarity wage policy, while profitable enterprises profited from the labour costs comparatively favorable for them, which set free employee by means of the active labor policy qualified for new jobs and which are controlled for inflation by a restrictive fiscal policy.

Through to the end of the 1980s, Sweden was the most prominent example of a Social-Democratic society pursuing full employment. The Rehn-Meidner Model was employed to achieve this goal. The Rehn-Meidner Model proved successful in achieving its goal even during the fast growth of the post-war period and the economic crises of the 1970s and 1980s. The central principles of the Swedish labor policy since the post-war period are full employment and the claimant solidary wage policy with their theoretical correspondence in the Rehn Meidner model.


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