ABSTRACT
When an inflationary expansion takes place within one large member of an international group, the stimulus is communicated to other members through the rise in certain groups of prices. The increases in value of product per man-hour between 1924-6 and 1929 were most prominent in the iron ore, metal, paper, chemical, mining, quarrying and wood industries, whereas there was actually a decline in the textiles, clothing, leather, hair and rubber trades. The engineering industry, in particular, exhibits a clear parallelism between the upward movement of wages, the import of capital goods, and physical productivity. The fundamental causes of the crisis of 1931 are to be traced to the maladjustments in Sweden's system induced by the expansion of 1924-9. Foreign deposits in Swedish banks rose by 138 millions to 217 millions; and the foreign exchange holdings of the Riksbank and other banks reached the high level of 400 millions by the end of 1930.
