Sweden's Real Exchange Rate Shock Absorbs Demand Shocks Better Than EMU Countries.
The study looked at what causes changes in Sweden's exchange rate. It found that most of these changes are due to supply and demand shocks, with demand shocks playing a bigger role in Sweden compared to other countries. This suggests that if Sweden controls its economic policies well, giving up its exchange rate might not be as costly as it is for other countries in the Eurozone.