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...

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

During the past two years, the world has experienced its most severe slump since the Great Depression in the 1930s. The Nordic countries have been hit harder than most other countries. Due to its sharpness and depth, the current global financial and economic crisis has initiated a wide debate on...

A comparison of the boom-and-bust cycle of Sweden and Finland during 198593 reveals remarkable similarities. We examine macroeconomic developments during the period with a special emphasis on asset market developments. The seeds of the crisis were »traditional» Nordic problems combined with...

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...

The Centre for Monetary Economics (CME) at the Norwegian School of Management BI has for the third time invited a committee of economists for Norges Bank Watch, with the objective to evaluate the monetary-policy regime in Norway and Norges Bank’s conduct of monetary policy. The new committee...

This paper looks at intergenerational welfare effects of increased public debt when union power in pay bargaining generates structural unemployment. Debt policy works through capital accumulation as well as the price of a fixed asset that is owned by the old generation. Under a reasonable...