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Alternative Fiscal Rules for Norway
Author:
Mr. Daniel Leigh
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Mr. Etibar Jafarov
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Series:
IMF Working Papers
Volume/Issue:
Volume 2007: Issue 241
Language:
English
Publication Date:
01 Oct 2007
DOI:
https://doi.org/10.5089/9781451868043.001
ISBN:
9781451868043
ISSN:
1018-5941
Pages:
30
Keywords:
WP; GDP; GPF assets; budget
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper considers long-term fiscal policy options in Norway, the world's fifth largest oil exporter, in light of the substantial expected increase in pension outlays. It compares the current fiscal rule, which targets a (central government structural) non-oil deficit equal to 4 percent of Government Pension Fund assets, with three alternatives that save a larger share of oil revenue and accumulate more assets to pay for aging costs. It also analyzes the macroeconomic consequences of accumulating more assets, finding that the additional income generated from more assets allows lower tax rates, with positive effects on long-term output.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund