Skip to main content
SpringerLink
Log in

Growth and Technical Change in Finland: The Role of Collective Sharing of Economic Risks

  • Conference paper
Explaining Technical Change in a Small Country

  • 47 Accesses

Abstract

The post-war economic history of Finland is rather unconventional. Partially ruined, the country lost more than a tenth of its territory in the Second World War, repopulated 400.000 new inhabitants from the ceded areas and paid 5–6% of its GDP in war remuneration over the years of the late 1940s and 2% in the early years of the 1950s.2 This all required substantial reallocation of Finland’s scarce productive capacity. Subsequently, strong policy towards economic growth built into the tax system, monetary policy, commercial policy, and the development of state-owned companies launched the economy into a fast growth over decades. As indicated by the introductory chapter of the current book, the growth of Finnish manufacturing output was 3.1%, on the average, over 1973–1990; however, this growth rate reached an even more remarkable level of 6.6% in the preceding period of 1960–1973. In international income per capita comparisons, Finland was moving up. For understandable reasons, Finland was known as the Japan of the Nordic countries in the 1980s.

I am indebted to Matti Pohjola, Synnöve Vuori and Pekka Ylä-Anttila for many helpful comments

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 109.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Ahvenainen, J., E. Pihkala and V. Rasila (1982), Suomen taloushistoria 2. Teollistuva Suomi. Helsinki: Tammi.

    Google Scholar 

  • Arrow, K. (1962a), “The Economic Implications of Learning by Doing”, Review of Economic Studies 29, 155–73.

    Article  Google Scholar 

  • Arrow, K. (1962b), “Economic Welfare and the Allocation of Resources for Invention”, in: R. Nelson (ed.), The Rate and Direction of Inventive Activity: Economic and Social Factors, NBER, Princeton University Press.

    Google Scholar 

  • Barro, R.J. (1990), “Government Spending in a Simple Model of Endogenous Growth”, Journal of Political Economy.

    Google Scholar 

  • Caves, R.E. (1971), “International Corporations: The Industrial Economics of Foreign Investment”, Economica XXXVIII, 1–27.

    Article  Google Scholar 

  • Dahlstedt, R. (1975), Cycles in the Finnish Trade with the Soviet Union, Helsinki: Helsinki School of Economics.

    Google Scholar 

  • Dasgupta, P. and J. Stiglitz (1980), “Uncertainty, Industrial Structure and the Speed of R&D”, Bell Journal, 11, 1–28.

    Article  Google Scholar 

  • De Long, J.B. and L.H. Summers (1991), “Equipment Investment and Economic Growth”, Quarterly Journal of Economics, May, 445–502.

    Google Scholar 

  • Easterbrook, F.H. (1984), “Two Agency-Cost Explanations of Dividends”, American Economic Review, 74.

    Google Scholar 

  • Forsman, P. and P. Haaparanta (1991), “Hinnat ja vaihtosuhde: onko Suomen hintataso epätasapainossa?”, Paulon säätiö, 53–70 (in Finnish).

    Google Scholar 

  • Grossman, G. and E. Helpman (1991), Innovation and Growth in the Global Economy, Cambridge: The MIT Press.

    Google Scholar 

  • Jensen, M.C. (1986), “Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers”, American Economic Review, 76, 323–329.

    Google Scholar 

  • Kaldor, N. (1961), “Capital Accumulation and Economic Growth”, in: F. Lutz (ed.), The Theory of Capital, London: Macmillan.

    Google Scholar 

  • Kanniainen, V. (1986), “On the effects of inflation: the debtor-creditor hypothesis reconsidered”, The Finnish Journal of Business Economics 1986:4, 303–312.

    Google Scholar 

  • Kanniainen, V. (1991a), “Yritysten rahoituspolitiikka: selvitys Suomen pörssiyhtiöistä 1983–1987”, ETLA, (The Research Institute of the Finnish Economy), Discussion Papers No. 350 (in Finnish).

    Google Scholar 

  • Kanniainen, V. (1991b), Yhtiöveron hyvitysjärjestelmään siirtyminen Suomessa”, Helsinki: ETLA, (The Research Institute of the Finnish Economy), Series В No. 73 (in Finnish).

    Google Scholar 

  • Kanniainen, V. and J. Mustonen (1989), “Balanced Trade Under Uncertainty: A multiperiod Non-Cooperative Game Appproach”, European Journal of Political Economy, 5, 113–123.

    Article  Google Scholar 

  • Kanniainen, V. (1992), “Diffusion, R&D and Public Policy: Is It Better to be a First Mover or Fast Second?”, in: S. Vuori and P. Ylä-Anttila (1992).

    Google Scholar 

  • Kanniainen, V. and J. Södersten (1993a), “A New View of Corporate Taxation.

    Google Scholar 

  • Monitoring Costs, Expectations, and the Cost of Capital”, Department of Economics, Uppsala University, wp 1992:2, Journal of Public Economics, forthcoming.

    Google Scholar 

  • Kanniainen, V. (1993b), “Optimal Production of Innovations under Uncertainty”, Journal of Economics, forthcoming.

    Google Scholar 

  • Koester, R.B. and R.C. Kormendi (1989), “Taxation, Aggregate Activity and Economic Growth: Cross-Country Evidence on Some Supply Side Hypothesis”, Economic Inquiry 27, 367–386.

    Google Scholar 

  • Koskenkylä, H. and K. Pekonen (1992), “Miten palkkojen tulisi määräytyä Suomessa”, KOP, Taloudellinen katsaus 1992:3 (in Finnish).

    Google Scholar 

  • Kuznets, P.W. (1988), “An East Asian Model of Economic Development: Japan, Taiwan, and South Korea”, Economic Development and Cultural Change 36 (suppl.), SI 1–43.

    Google Scholar 

  • Leppänen, S. (1991), “Suomi ja Itävalta: Kaksi erilaista talouspoliittista strategiaa”, TTT, Katsaus 1991:1 (in Finnish).

    Google Scholar 

  • Lucas, R.E. (1988), “On the Mechanics of Economie Development”, Journal of Monetary Economies, 22, 3–42.

    Article  Google Scholar 

  • Löyttyniemi, T. (1992), “Yritysten velkaantuminen ja sen ratkaisu”, KOP, Taloudellinen katsaus 1992:4 (in Finnish).

    Google Scholar 

  • Niitamo, O. (1958), Tuottavuuden kehitys Suomen teollisuudessa vuosina 1925–1952, Kansantaloudellisia tutkimuksia 20, Helsinki (in Finnish).

    Google Scholar 

  • Paunio, J. (1969), “Comments on the Papers of Goran Ohlin and Andre Marchai”, in: P. Samuelson, (ed.), Proceedings of the Third Congress of the International Economic Association, Macmillan, St.Martin’s Press, 221–226.

    Google Scholar 

  • Pekkarinen, J., M. Pohjola, and B. Rowthorn (1991), (ed.): Social Corporatism — A Superior Economic System?, Oxford: Oxford University Press.

    Google Scholar 

  • Pohjola, M. (1991), “Tulopoliittinen neuvottelujärjestelmä ja hintataso”, Paulon säätiö, 73–87 (in Finnish).

    Google Scholar 

  • Pohjola, M. (1992), “Millaista Suomea olemme nyt tekemässä?”, Uudistuuko vai rapistuuko Suomi — hyvinvointiyhteiskunnan uudet valinnat, 27.8.1992 pidetyn seminaarin alustukset (in Finnish).

    Google Scholar 

  • Rebelo, S. (1990), “Long Run Policy Analysis and Long Run Growth”, NBER wp, April.

    Google Scholar 

  • Reinganum, J.F. (1989), “The Timing of Innovation: Research, Development, and Diffusion”, R. Schmalensee and R.D. Willig (eds.), in: Handbook of Industrial Organization, vol I, Elsevier Science Publishers B.V.

    Google Scholar 

  • Romer, P. (1986), “Increasing Returns and Long-Run Growth”, Journal of Political Economy, 94, 1002–37.

    Article  Google Scholar 

  • Romer, P.M. (1989a), “Increasing Returns and New Development in the Theory of Growth”, mimeo.

    Google Scholar 

  • Romer, P.M. (1989b), “Human Capital and Growth: Theory and Evidence”, NBER wp No. 3173.

    Book  Google Scholar 

  • Romer P.M. (1989c), “What Determines the Rate of Growth and Technical Change?”, The World Bank, wp No. 279.

    Google Scholar 

  • Romer, P.M. (1990a), “Endogenous Technological Change”, Journal of Political Economy, 98,71–101.

    Article  Google Scholar 

  • Romer, P.M. (1990b), “Capital, Labor, and Productivity”, Brooking Papers on Economic Activity, 337–367.

    Google Scholar 

  • Sala-i-Martin, X. (1990), “Lecture Notes on Economic Growth (II): Five Propotype Models of Endogenous Growth”, NBER wp 3564.

    Google Scholar 

  • Scott, M.G. (1989), A New View of Economic Growth, Oxford: Oxford University Press.

    Google Scholar 

  • Sheshinski, E. (1967), “Optimal Accumulation with Learning by Doing”, in: K. Shell (ed.), Essays on the Theory of Optimal Economic Growth, M.I.T. Press.

    Google Scholar 

  • Sinn, H.-W. (1990), “The Vanishing Harberger Triangle”, Journal of Public Economics.

    Google Scholar 

  • Skurnik, H. and V. Kanniainen (1990), “Ulkomaisten osinkojen verotuskohtelu yhtiöveron hyvitysjärjestelmässä”, КОР, Taloudellinen katsaus (in Finnish).

    Google Scholar 

  • Solow, R. (1956), “A Contribution to the Theory of Economic Growth”, The Quarterly Journal of Economics, 70, 65–94.

    Article  Google Scholar 

  • Stiglitz, J.E. and A. Weiss (1981), “Credit Rationing in Markets With Imperfect Information”, American Economic Review, 71, 393–410.

    Google Scholar 

  • Stulz, R.M. (1990), “Managerial discretion and optimal financing policies”, Journal of Financial Economics 26, 3–27.

    Article  Google Scholar 

  • Summers, R. and A. Heston (1988), “A New Set of International Comparisons of Real Product and Price Levels: Estimates of 130 Countries”, The Review of Income and Wealth 34, 1–25.

    Article  Google Scholar 

  • Swan, T.W. (1956), “Economic Growth and Capital Accumulation”, Economic Record, 32, 334–61.

    Article  Google Scholar 

  • Vuori, S. (1988), “Total Factor Productivity and R&D in Finnish, Swedish and Norwegian Manufacturing Industries, 1964–1983”, ETLA (The Research Institute of the Finnish Economy), Discussion Papers No. 257, 1988.

    Google Scholar 

  • Vuori, S. and P. Vuorinen (1993), “Outlines of the Finnish Innovation System: The Institutional Setup and Performance”, first chapter of this volume.

    Google Scholar 

  • Vuori, S. and P. Ylä-Anttila, (eds.) (1992), Mastering Technology Diffusion — The Finnish Experience, Helsinki: ETLA (The Research Institute of the Finnish Economy), Series В No. 82.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, University of Helsinki, Finland

    Vesa Kanniainen

Authors
  1. Vesa Kanniainen
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. ETLA, The Research Institute of the Finnish Economy, Lönnrotinkatu 4 B, SF-00120, Helsinki, Finland

    Synnöve Vuori  & Pentti Vuorinen  & 

Rights and permissions

Reprints and permissions

Copyright information

© 1994 Physica-Verlag Heidelberg

About this paper

Cite this paper

Kanniainen, V. (1994). Growth and Technical Change in Finland: The Role of Collective Sharing of Economic Risks. In: Vuori, S., Vuorinen, P. (eds) Explaining Technical Change in a Small Country. Physica, Heidelberg. https://doi.org/10.1007/978-3-642-95913-4_4

Download citation

  • DOI: https://doi.org/10.1007/978-3-642-95913-4_4

  • Publisher Name: Physica, Heidelberg

  • Print ISBN: 978-3-7908-0760-8

  • Online ISBN: 978-3-642-95913-4

  • eBook Packages: Springer Book Archive

Publish with us

Policies and ethics

Search

Navigation