We estimate a small open-economy DSGE model for Norway with two specifications of monetary policy: a simple instrument rule and optimal policy based on an intertemporal loss function. The empirical fit of the model with optimal policy is as good as the model with a simple rule. This result is...

Based on high-frequency data for Norway and Sweden, we investigate to what extent explicit forward guidance from monetary policy makers, by means of publishing the path of expected future policy rates, affects the market yield curve. We summarise movements in the yield curve by two latent...

Over the last decade monetary policy in Norway has gradually evolved from exchange rate targeting to flexible inflation targeting. In addition, globalization has affected the Norwegian economy substantially over the last decade. Monetary policy has increasingly been challenged on how to respond...

In this paper we provide a broad outline of the forecasting and policy analysis system adopted at Norges Bank.

Based on the established literature, we develop a structural model for the Norwegian economy that incorporates feed-backs from asset prices and credit to the real economy. We then use this framework for policy analysis, focusing on the role of asset prices and credit under optimal simple...

In this paper, we estimate the neutral real rate for the Norwegian economy using two different empirical models, a vector autoregressive model with time-varying parameters (TVP-VAR) and a State-Space (SS) model similar to the Laubach-Williams model, respectively. In line with international...

In this paper, we estimate various dynamic wage equations for mainland Norway. Our starting point is a standard Phillips curve. We then expand on our baseline specification by adding explanatory variables suggested by economic theory. In our preferred specification, the labor share plays the...

This paper provides an empirical assessment of the power of forward guidance at different horizons, shedding new light on the strength of the "forward guidance puzzle". Our identification strategy allows us to disentangle the change in future interest rates stemming from deviations from the...

The output gap (measuring the deviation of output from its potential) is a crucial concept in the monetary policy framework, indicating demand pressure that generates inflation. The output gap is also an important variable in itself, as a measure of economic fluctuations. However, its definition...

This paper discusses the properties of price- and Cost-of-Living indexes that follow from specific assumptions about the structure of consumer preferences. Of particular interest are indexes for elementary aggregates. In the first part of the paper we show how particular indexes for elementary...