The strong growth of the Finnish economy will continue

On Monday 5 February, Erkki Liikanen, Governor of the Bank of Finland, gave a lecture open to all members of the Aalto community as part of Professor Matti Pohjola's course “Principles of Economics”. Liikanen, who is an honorary doctor of both the School of Business and the School of Science and Technology, has been one of the key advocates behind the creation of the new research centre of economics, Helsinki GSE (Graduate School of Economics). The research unit will begin its operation this autumn, when its doctoral programme and the post-doc-oriented programme will be launched.

Erkki Liikanen began his lecture with a highly topical news item: on the very same day, the former investment banker Jerome H. Powell took office as the new Chairman of the Board of Governors of the Federal Reserve System, FED, in the United States. The announcement was followed by a concise review of the outlook of the global economy and the state of the Finnish economy.

Major drop in unemployment

The world economy drifted into a crisis during the first decade of the new millennium. However, the situation has calmed down since 2012–2013. The crisis gave quite a blow to the gross national product (GNP) within the eurozone, but it has now clearly exceeded the pre-crisis level. During the European debt crisis, such economic indicators as the household indebtedness and the national debt increased rapidly.

‘However, it is important to recognise the political uncertainty, which is difficult to estimate in monetary terms. In Europe, brexit generates uncertainty, the role of Russia in the international community gives reason for concern, the risk of an armed conflict prevails in North Korea, and, globally, we need to follow the impacts of climate change.’ Erkki Liikanen said, giving examples of the uncertainties.

According to Governor Erkki Liikanen, the strong growth of the Finnish economy will continue at the beginning of 2018. On the other hand, the growth figures of the Finnish industry and exports raise the question whether the phase of the strongest growth is already over. Good news is that the labour market situation, or the employment rate, has improved, even though the unemployment rate still remains above 8%, and the productivity of work has begun to grow. The number of the long-term unemployed has fallen, but still remains at a high level. It is a big economic problem that the unemployment rate of young men in particular is above the average.

At the end of the lecture, students Kristian Koskinen and Helena Rantakaulio from Aalto Economics, the organisation of the economics students at the School of Business, presented Erkki Liikanen with a symbolic wooden coin for his lecture today and his earlier guest lectures. Engraved on the coin were Erkki Liikanen's name, the coat of arms logo of Aalto Economics and the serial number 1. This was already the tenth time that Liikanen gave a guest lecture on Matti Pohjola’s course.

‘It has been nice to come here, and I wish that my excellent co-operation with Professor Pohjola will continue also in the future,’ Liikanen said.

Professor Pohjola has high-level speakers with social influence giving guest lectures on his courses on a regular basis. The previous guest lecture was given by Minister for Foreign Trade and Development Kai Mykkänen in January.