Should the government run fiscal deficits in response to an adverse external shock that warrants transfer of resources from production of nontraded to traded goods? This article considers normative fiscal policy implications of sectoral adjustment costs in a two-sector model with overlapping...

This paper draws the line between the Norwegian boom-bust cycle and crises in the late 1980s and early 1990s, the succeeding institutional and structural reforms and the strong macroeconomic performance and stability of the last two decades. The systemic banking crisis and speculative attack on...

The effects of oil price risk on international risk sharing are studied. Both petroleum importing and exporting countries within OECD-Europe are considered. The empirical analysis indicates that uninsured idiosyncratic oil price risk accounts for parts of the observed low consumption...