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Europe > Norway

You are looking at 1 - 10 of 18 items for :

  • Type: Journal Issue x
  • Macroeconomics: Consumption; Saving; Wealth x
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Cover IMF Staff Country Reports
Norway: 2023 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. European Dept.
The 2023 Article IV Consultation discusses that Norway grew strongly in 2022 but the pace of output growth receded somewhat this year. Record-high energy and food prices together with much higher interest rates put pressure on households’ purchasing power. Nonetheless, mainland gross domestic product growth is still expected to be positive, supported by strong business investment and exports. Norway experienced one of the highest growth rates among advanced economies last year, and risks remain balanced. Growth is continuing but at a more modest pace. The country has experienced windfall gains from high petroleum and natural gas prices that have so far countered global headwinds. The banking system is strong but tightening global conditions pose risks. Risks to financial stability appear to be broadly manageable, but continued vigilance is needed given the heightened uncertainty. Progress on structural reforms has been piecemeal. Some steps have been taken in further upskilling the workforce, including increased vocational training and the planned introduction of a youth guarantee scheme.
Keywords:
money market rate; inflation risk; liability positions vis-a-vis nonresident; inflation expectation; mainland GDP growth; Inflation; Fiscal stance; Central bank policy rate; Consumption; Labor markets; Global
Cover IMF Working Papers
Climate Mitigation Policy in Denmark: A Prototype for Other Countries
Nicoletta Batini
,
Ian W.H. Parry
, and
Mr. Philippe Wingender
Denmark has a highly ambitious goal of reducing greenhouse gas emissions 70 percent below 1990 levels by 2030. While there is general agreement that carbon pricing should be the centerpiece of Denmark’s mitigation strategy, pricing needs to be effective, address equity and leakage concerns, and be reinforced by additional measures at the sectoral level. The strategy Denmark develops can be a good prototype for others to follow. This paper discusses mechanisms to scale up domestic carbon pricing, compensate households, and possibly combine pricing with a border carbon adjustment. It also recommends the use of revenue-neutral feebate schemes to strengthen mitigation incentives, particularly for transportation and agriculture, fisheries and forestry, though these schemes could also be applied more widely.
Keywords:
Denmark climate mitigation; carbon pricing; feebate; revenue recycling; border carbon adjustment; transportation; agriculture.; WP; emission rate; EU ETS; emissions price; sliding scale; greenhouse gas; proxy emissions fee; Climate change; agriculture; energy price; mitigation target; nitrogen oxide emission; Carbon tax; Greenhouse gas emissions; Consumption; Global
Cover IMF Working Papers
Heterogeneity and Persistence in Returns to Wealth
Andreas Fagereng
,
Luigi Guiso
,
Mr. Davide Malacrino
, and
Luigi Pistaferri
We provide a systematic analysis of the properties of individual returns to wealth using twelve years of population data from Norway’s administrative tax records. We document a number of novel results. First, during our sample period individuals earn markedly different average returns on their financial assets (a standard deviation of 14%) and on their net worth (a standard deviation of 8%). Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within asset classes. Third, returns are positively correlated with wealth: moving from the 10th to the 90th percentile of the financial wealth distribution increases the return by 3 percentage points - and by 17 percentage points when the same exercise is performed for the return to net worth. Fourth, wealth returns exhibit substantial persistence over time. We argue that while this persistence partly reflects stable differences in risk exposure and assets scale, it also reflects persistent heterogeneity in sophistication and financial information, as well as entrepreneurial talent. Finally, wealth returns are (mildly) correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate.
Keywords:
WP; private equity; expected return; long-term debt; wealth distribution; Wealth inequality; returns to wealth; net worth; heterogeneity; intergenerational mobility; financial wealth; wealth return regression; return heterogeneity; book value; portfolio return; assets return; heterogeneity channel; market value; risk tolerance; wealth share; return on assets; Income distribution; Stocks; Housing; Capital income; Income
Cover IMF Working Papers
Fundamental Drivers of House Prices in Advanced Economies
Ms. Nan Geng
House prices in many advanced economies have risen substantially in recent decades. But experience indicates that housing prices can diverge from their long-run equilibrium or sustainable levels, potentially followed by adjustments that impact macroeconomic and financial stability. Therefore there is a need to monitor house prices and assess whether they are sustainable. This paper focuses on fundamentals expected to drive long run trends in house prices, including institutional and structural factors. The scale of potential valuation gaps is gauged on the basis of a cross-country panel analysis of house prices in 20 OECD countries.
Keywords:
WP; house price; price; housing price; Housing markets; House prices; Valuation gaps; OECD countries; understanding housing price development; asset price movement; price correction; valuation gap; interaction terms; housing investment; elasticities of housing supply; house price trend; long-run house price development; long-run house price trend; housing stock; Housing prices; Housing; Mortgages; Disposable income; Asset prices; Global
Cover Technical Notes and Manuals
The Revenue Administration–Gap Analysis Program: An Analytical Framework for Excise Duty Gap Estimation
Mr. Mick Thackray
The IMF Fiscal Affairs Department’s Revenue Administration Gap Analysis Program (RA-GAP) assists revenue administrations from IMF member countries in monitoring taxpayer compliance through tax gap analysis. The RA-GAP analytical framework for estimating excise gaps presented in this Technical Note sets out the steps and data required for comprehensive top-down gap estimates based on a comparison of actual collections to potential collections, which is estimated from consumption (or use) and expenditure of excise commodities. The note outlines the motivation for, and different approaches to, excise gap estimation; and identifies the design criteria for robust gap estimates. The note was jointly produced by RA-GAP team and the Slovak Republic’s Institute for Financial Policy, piloting the framework for the mineral oils excise gap in Slovakia.
Keywords:
TNM; gap estimate; excise rate; excise gap; compliance risk; gap analysis; Tax Administration; Tax Compliance; Excise; Tax Gap; Tax Avoidance; Tax Evasion; Excise Smuggling; Cross-Border Shopping; Shadow Economy; Non-Observed Economy; excise collection; excise goods; rate change; gap study; understanding excise transaction; Excises; Consumption; Tax administration core functions
Cover IMF Working Papers
News Shocks in Open Economies: Evidence from Giant Oil Discoveries
Mr. Rabah Arezki
,
Valerie A Ramey
, and
Liugang Sheng
This paper explores the effect of news shocks on the current account and other macroeconomic variables using worldwide giant oil discoveries as a directly observable measure of news shocks about future output ? the delay between a discovery and production is on average 4 to 6 years. We first present a two-sector small open economy model in order to predict the responses of macroeconomic aggregates to news of an oil discovery. We then estimate the effects of giant oil discoveries on a large panel of countries. Our empirical estimates are consistent with the predictions of the model. After an oil discovery, the current account and saving rate decline for the first 5 years and then rise sharply during the ensuing years. Investment rises robustly soon after the news arrives, while GDP does not increase until after 5 years. Employment rates fall slightly for a sustained period of time.
Keywords:
WP; open economy; substitution effect; oil; news shocks; current account and business cycles; investment-GDP ratio; oil discovery; ratio decrease; account-GDP ratio; saving-GDP ratio; anticipation effect; Current account; Oil production; Oil sector; Consumption; Middle East; Global; North Africa
Cover IMF Working Papers
Spillovers in the Nordic Countries
Mr. Dirk V Muir
Denmark, Finland, Norway, and Sweden form a tightly integrated region which has strong ties with the euro area as well as some exposure to Russia. Using the IMF’s Global Integrated Monetary and Fiscal model (GIMF), we examine spillovers the region could face, focusing on possible scenarios from the rest of the euro area and Russia, and the fall in global oil prices. We show that the spillovers from these scenarios differ in magnitude and impact, regardless of the high degree of integration among the four Nordic economies. These differences are driven by the fact that Denmark and Finland have no independent monetary policy, and Denmark and Norway are net energy exporters while Finland and Sweden are energy importers. We infer lessons for policy from the outcomes.
Keywords:
WP; real GDP; Finland; price; euro area; euro; Spillovers; monetary policy; fiscal policy; dynamic stochastic general equilibrium models; Nordic countries; area imports; real GDP trough; mainland real GDP; oil price drop; monetary policy response; demand share; Norway's mainland real GDP trough; demand share of the oil price decrease; investment demand; mainland real GDP trough; monetary policy in Denmark; GDP reduction; Energy pricing; Energy prices; Consumption; Oil prices; Sovereign wealth funds; Europe; Global
Cover IMF Staff Country Reports
Islamic Republic of Iran: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
This Selected Issues paper on Iran focuses on the Targeted Subsidy Reform Law (TSRL). This is the basic law governing the implementation of the subsidy reform in Iran. The TSRL envisaged bringing subsidized prices close to international levels over a five-year period. The paper reviews the implementation of the first phase of the subsidy reform, with a particular emphasis on macroeconomic management. The sharp depreciation of the exchange rate and high inflation significantly undermined progress under the reform. High inflation partially reversed the relative price change under the reform.
Keywords:
ISCR; CR; price; government; monetary policy; Iran; NDFI supervisor; output variability frontier; NDFI resource; cash transfer; SWF assets; founding document; Inflation; Currencies; Energy prices; Monetary policy frameworks; Consumption; Global
Cover IMF Working Papers
Fiscal Policy and Lending Relationships
Mr. Giovanni Melina
and
Stefania Villa
This paper studies how fiscal policy affects loan market conditions in the US. First, it conducts a Structural Vector-Autoregression analysis showing that the bank spread responds negatively to an expansionary government spending shock, while lending increases. Second, it illustrates that these results are mimicked by a Dynamic Stochastic General Equilibrium model where the bank spread is endogenized via the inclusion of a banking sector exploiting lending relationships. Third, it shows that lending relationships represent a friction that generates a financial accelerator effect in the transmission of the fiscal shock.
Keywords:
WP; government spending; Fiscal policy; deep habits; lending relationships; lending relationship; government spending expansion; relationship duration; government spending shock; consumption crowding in; market condition; boosting lending; government consumption expenditure; Consumption; Loans; Private consumption; Government consumption; Global
Cover IMF Working Papers
Interest Rate Rules, Endogenous Cycles, and Chaotic Dynamics in Open Economies
Luis-Felipe Zanna
and
Mr. Marco Airaudo
We present an extensive analysis of the consequences for global equilibrium determinacy in flexible-price open economies of implementing active interest rate rules, i.e., monetary rules where the nominal interest rate responds more than proportionally to inflation. We show that conditions under which these rules generate aggregate instability by inducing liquidity traps, endogenous cycles, and chaotic dynamics depend on specific characteristics of open economies. In particular, rules that respond to expected future inflation are more prone to induce endogenous cyclical and chaotic dynamics the more open the economy to trade.
Keywords:
WP; interest rate; Small Open Economy; Interest Rate Rules; Taylor Rules; Multiple Equilibria; Chaos; Cycles and Endogenous Fluctuations; liquidity trap; exchange rate pass-through; closed economy; interest rate rule; money balance; marginal utility; Inflation; Exchange rate pass-through; Consumption; Real exchange rates; Import prices; Global