Replacing imports with domestic production

The study examines the adjustment of the Finnish national economy to international trade and the division of labour after the Second World War.

The post-war period began with strict regulation and repeated devaluations. It was not until 1957 that quantitative regulation of Western imports was abandoned, and the liberalisation of international trade accelerated in the 1960s with the EFTA and EEC agreements. Trade liberalisation accelerated economic growth and structural change, but also intensified economic problems.

A central theoretical observation is that the theory of international trade has traditionally bypassed the costs of adjustment to free trade and examined only the end result. For a small country heavily dependent on foreign trade, however, the capacity for adjustment is crucial. Finland’s adjustment difficulties are reflected in increased foreign debt, emigration, and sharp cyclical fluctuations — which is why improving adjustment capacity is a central question of economic policy. (AI translation)

• ISSN: 0358-5980
• ISBN: 951-9281-09-6