Swedish inflation

Carmen Reinhart on the right, in connection with a Fed conference in 2010. Reed Saxon / Ap  

The Harvard professor: Greater risks in Sweden than in the USA  

Sweden's economy mainly has two problems, according to the Harvard professor and the World Bank's former chief economist, Carmen Reinhart, in an interview with SvD.  

The first is that Swedish house prices have risen sharply since the financial crisis, which has led to high indebtedness. The second is the Swedish inflation of just over 8 percent, which is higher than both the Eurozone's and the USA's at 7 and 5 percent, respectively. 

- In countries with high debts, even modest shocks can have large snowball effects for the entire economy. In Sweden, this risk is greater than in the US at the moment, she says.  

In the interview, she urges the Riksbank to continue raising the interest rate, but to do so gradually and not to be too eager to lower it again