Editing Economy of Denmark (section)

==History==
[[File:GDP per capita development in Denmark.jpg|thumb|Development of real GDP per capita, 1820 to 2018]]
Denmark's long-term economic development has largely followed the same pattern as other Northwestern European countries. In most of recorded history Denmark has been an agricultural country with most of the population living on a [[subsistence level]]. Since the 19th century, Denmark has gone through an intense technological and institutional development. The material standard of living has experienced formerly unknown rates of growth, and the country has been industrialized and later turned into a modern service society.

Almost all of the land area of Denmark is arable. Unlike most of its neighbours, Denmark has not had extractable deposits of minerals or fossil fuels, except for the deposits of oil and natural gas in the North Sea, which started playing an economic role only during the 1980s. On the other hand, Denmark has had a logistic advantage through its long coastal line and the fact that no point on Danish land is more than 50 kilometers from the sea – an important fact for the whole period before the industrial revolution when sea transport was cheaper than land transport.<ref name=henriksen>{{cite web| url = http://eh.net/encyclopedia/an-economic-history-of-denmark/| title = Ingrid Henriksen: An Economic History of Denmark. EH.Net Encyclopedia, edited by Robert Whaples. |date=6 October 2006}}</ref> Consequently, foreign trade has always been very important for the economic development of Denmark. 
[[File:Penning - dannebrogsmønt - Kmm 0034.jpg|thumb|left|Danish silver [[Norwegian penning|penning]] from the time of [[Valdemar I of Denmark]].]]

Already during the [[Stone Age]] there was some foreign trade,<ref name=busck>{{in lang|da}} [http://danmarkshistorien.dk/leksikon-og-kilder/vis/materiale/udenrigshandel-foer-1848/ Steen Busck: Udenrigshandel før 1848. From danmarkshistorien.dk, Aarhus University. Date 6 July 2012. ]</ref> and even though trade has made up only a very modest share of total Danish [[value added]] until the 19th century, it has been decisive for economic development, both in terms of procuring vital import goods (like metals) and because new knowledge and technological skills have often come to Denmark as a byproduct of goods exchange with other countries. The emerging trade implied specialization which created demand for means of [[payment]]s, and the earliest known Danish coins date from the time of [[Svend Tveskæg]] around 995.<ref>{{in lang|da}} [http://www.nationalbanken.dk/da/om_nationalbanken/historie/Sider/650-f.-kr.-1020---Etablering-af-M%C3%B8ntv%C3%A6sen.aspx 650 f. kr.-1020 – Etablering af møntvæsen. Website of Danmarks Nationalbank, date 14 June 2016.]</ref>

[[File:Otto Thott.jpg|thumb|Count [[Otto Thott]] was the foremost representative of [[mercantilist]] thought in Denmark.]]

Improvements in shipping technology allowed traders to sail around Jutland and into the Baltic Sea directly, and Danish warships collected the [[Sound Toll]] from these mainly Dutch merchants, in exchange for protection. Nordic rulers before the mid-seventeenth century welcomed the Dutch merchants for their efficient shipping services and inflow of investments which boosted industrial development.<ref>{{cite book |last1=Hanno Brand, Leos Müller |title=The Dynamics of Economic Culture in the North Sea and Baltic Region In the Late Middle Ages and Early Modern Period |date=2007 |publisher=Verloren |isbn=9789065508829 |pages=19–21}}</ref> According to economic historian [[Angus Maddison]], Denmark was the sixth-most prosperous country in the world around 1600. The population size relative to arable agricultural land was small so that the farmers were relatively affluent, and Denmark was geographically close to the most dynamic and economically leading European areas since the 16th century: the Netherlands, the northern parts of Germany, and Britain. Still, 80 to 85% of the population lived in small villages on a subsistence level.<ref name=henriksen/>

[[Mercantilism]] was the leading economic doctrine during the 17th and 18th century in Denmark,<ref name=merkantilisme>{{in lang|da}} [http://danmarkshistorien.dk/leksikon-og-kilder/vis/materiale/merkantilisme/ Steen Busck: Merkantilisme. From danmarkshistorien.dk, Aarhus University. Date 9 February 2015.]</ref> leading to the establishment of monopolies like [[Asiatisk Kompagni]], development of physical and financial infrastructure like the first Danish bank [[Kurantbanken]] in 1736 and the first "[[mortgage industry of Denmark|kreditforening]]" (a kind of [[building society]]) in 1797, and the acquisition of some minor Danish colonies like [[Tranquebar]].<ref>{{in lang|da}} [http://danmarkshistorien.dk/leksikon-og-kilder/vis/materiale/merkantilisme-og-danske-tropekolonier/ Peter Bejder and Benjamin Kristensen: Merkantilisme og danske tropekolonier, ca. 1600–1917. From danmarkshistorien.dk, Aarhus University. Date 2 November 2015.]</ref>

At the end of the 18th century major agricultural reforms took place that entailed decisive structural changes.<ref name=henriksen/><ref name=":1">{{Citation |last=Kærgård |first=Niels |title=The Economic History of Denmark, 1784–2019 |date=2022 |url=https://oxfordre.com/economics/display/10.1093/acrefore/9780190625979.001.0001/acrefore-9780190625979-e-681 |encyclopedia=Oxford Research Encyclopedia of Economics and Finance |doi=10.1093/acrefore/9780190625979.013.681 |isbn=978-0-19-062597-9}}</ref> However, the Napoleonic Wars caused Copenhagen to lose its status as an international centre of finance and trade.<ref>{{cite book |title=The New Encyclopaedia Britannica |date=1983 |publisher=Encyclopaedia Britannica |isbn=9780852294000 |page=324 |edition=15}}</ref> Politically, mercantilism was gradually replaced by liberal thoughts among the ruling elite. Following a monetary reform after the Napoleonic wars, the present Danish central bank [[Danmarks Nationalbank]] was founded in 1818.

There exists [[national accounting]] data for Denmark from 1820 onwards thanks to the pioneering work of Danish economic historian [[Svend Aage Hansen]].<ref>{{in lang|da}} Hansen, Sv. Aa. (1976): Økonomisk vækst i Danmark. Volume I: 1720–1914, volume II: 1914–70. Akademisk Forlag.</ref> They find that there has been a substantial and permanent, though fluctuating, economic growth all the time since 1820. The period 1822–94 saw on average an annual growth in factor incomes of 2% (0.9% per capita) From around 1830 the agricultural sector experienced a major boom lasting several decades, producing and exporting grains, not least to Britain after 1846 when British grain import duties were abolished. When grain production became less profitable in the second half of the century, the Danish farmers made an impressive and uniquely successful change from vegetarian to animal production leading to a new boom period.<ref name=henriksen/> Parallelly industrialization took off in Denmark from the 1870s. At the turn of the century industry (including artisanry) fed almost 30% of the population.<ref>{{in lang|da}} [http://danmarkshistorien.dk/perioder/det-unge-demokrati-1848-1901/fremstillingserhverv-og-industrialisering/ Erik Strange Petersen: ''Det unge demokrati, 1848–1901: Fremstillingserhverv og industrialisering''. From danmarkshistorien.dk, Aarhus University. Undated, retrieved 23 October 2017.] {{Webarchive|url=https://web.archive.org/web/20180929010617/http://danmarkshistorien.dk/perioder/det-unge-demokrati-1848-1901/fremstillingserhverv-og-industrialisering/ |date=29 September 2018}}</ref>

During the 20th century agriculture slowly dwindled in importance relative to industry,<ref name=":1" /> but agricultural employment was only during the 1950s surpassed by industrial employment. The first half of the century was marked by the two world wars and the Great Depression during the 1930s. After World War II Denmark took part in the increasingly close international cooperation, joining [[OEEC]]/[[OECD]], [[IMF]], [[GATT]]/[[WTO]], and from 1972 the [[European Economic Community]], later [[European Union]]. Foreign trade increased heavily relative to GDP. The economic role of the public sector increased considerably, and the country was increasingly transformed from an industrial country to a country dominated by production of services. The years 1958–73 were an unprecedented high-growth period. The 1960s are the decade with the highest registered real per capita growth in GDP ever, i.e. 4.5% annually.<ref>{{in lang|da}} Johansen, H.C. (2005): Gyldendal og Politikens Danmarkshistorie, volume 17. Statistik og register. P. 157. Gyldendal and Politikens Forlag.</ref>
[[File:Torben M. Andersen professor i nationalekonomi arhus universitet pa konferensen Fiscal consequences of the crises, som anornades av de nordiska finansministrarna 2010-03-22.jpg|thumb|As a chairman of the Danish Economic Council and of several policy-preparing commissions, Professor [[Torben M. Andersen]] has played an important role in Danish economic policy debates for the last decades.]]

During the 1970s Denmark was plunged into a crisis, initiated by the [[1973 oil crisis]] leading to the hitherto unknown phenomenon [[stagflation]]. For the next decades the Danish economy struggled with several major so-called "balance problems": High unemployment, current account deficits, inflation, and government debt. From the 1980s economic policies have increasingly been oriented towards a long-term perspective, and gradually a series of structural reforms have solved these problems. In 1994 [[active labour market policies]] were introduced that via a series of labour market reforms have helped reducing [[structural unemployment]] considerably.<ref>{{in lang|da}} [http://www.nationalbanken.dk/da/publikationer/Sider/2012/09/Arbejdsmarkedsreformer-i-Danmark-og-Tyskland.aspx Jacob Isaksen, Uffe Mikkelsen and Peter Beck Nellemann (2012): Arbejdsmarkedsreformer i Danmark og Tyskland. Kvartalsoversigt, 3. kvartal 2012, del 1. Danmarks Nationalbank.]</ref> A series of tax reforms from 1987 onwards, reducing tax deductions on interest payments, and the increasing importance of compulsory labour market-based funded pensions from the 1990s have increased private savings rates considerably, consequently transforming secular current account deficits to secular surpluses. The announcement of a consistent and hence more credible fixed exchange rate in 1982 has helped reducing the inflation rate.

In the first decade of the 21st century new economic policy issues have emerged. A growing awareness that future demographic changes, in particular increasing longevity, could threaten [[fiscal sustainability]], implying very large fiscal deficits in future decades, led to major political agreements in 2006 and 2011, both increasing the future eligibility age of receiving public age-related pensions. Mainly because of these changes, from 2012 onwards the Danish fiscal sustainability problem is generally considered to be solved.<ref>{{in lang|da}} [https://dors.dk/vismandsrapporter/dansk-oekonomi-efteraar-2016/kapitel-iii-finanspolitisk-holdbarhed Finanspolitisk holdbarhed. Kapitel III i De Økonomiske Råds Formandskab: Dansk Økonomi, efterår 2016. De Økonomiske Råds Sekretariat. P. 146.]</ref> Instead, issues like decreasing productivity growth rates and increasing [[economic inequality|inequality]] in [[income distribution]] and consumption possibilities are prevalent in the [[public debate]].

The global [[Great Recession]] during the late 2000s, the accompanying [[European debt crisis|Euro area debt crisis]] and their repercussions marked the Danish economy for several years. Until 2017, unemployment rates have generally been considered to be above their structural level, implying a relatively stagnating economy from a business-cycle point of view. From 2017/18 this is no longer considered to be the case, and attention has been redirected to the need of avoiding a potential [[Overheating (economics)|overheating situation]].

In 2022 the popularity of [[Novo Nordisk]]'s [[Ozempic]] and [[Wegovy]] for weight loss began greatly affecting the Danish economy. The pharmaceutical industry contributed two thirds of growth that year, and 1.7 points of the 1.9% year-over-year growth in the first quarter of 2023. {{as of|2023|08}} Novo Nordisk's market capitalization—Europe's second-largest, after [[LVMH]]—exceeded the size of the entire national economy, and it is the largest payer of [[corporate tax]]es to the Danish state. Economists discussed whether the government needed to publish data including and excluding the company; as the enormous economic growth did not similarly increase employment, data including Novo Nordisk is misleading regarding the Danish [[business cycle]]. Some worried that the nation might become overdependent on the company, similar to what happened to the [[economy of Finland]] with [[Nokia]], or that Novo Nordisk's success might cause [[Dutch disease]].<ref name="nelson20230830">{{Cite news |last=Nelson |first=Eshe |date=2023-08-30 |title=Novo Nordisk Tilts G.D.P. In Denmark |page=B1 |work=The New York Times |url=https://www.nytimes.com/2023/08/28/business/denmark-ozempic-wegovy.html |access-date=2023-10-05 |issn=0362-4331}}</ref>