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Price-level determinacy, lower bounds on the nominal interest rate, and liquidity traps

Alstadheim, Ragna; Henderson, Dale - Norges Bank - 2006

We consider standard monetary-policy rules with inflation-rate targets and interest-rate or money-growth instruments using a flexible-price, perfect-foresight model. There is always a locally-unique target equilibrium. There are also below-target equilibria (BTE) with inflation always below...

Persistent link: https://www.econbiz.de/10005063096

The historical connection between short term output and prices in a small open economy

Grytten, Ola; Hunnes, Arngrim - Norges Bank - 2009

According to a Keynesian view, short term output fluctuations are normally demand side led. Since prices reflect demand …, they should mirror output fluctuations. Thus, prices and output are expected to move in the same direction in the short run …. The present paper investigates the historical co-movements of output and prices for a small open raw material based …

Persistent link: https://www.econbiz.de/10008514717

Central banks under German rule during World War II: The case of Norway

Espeli, Harald - Norges Bank - 2012

Until the German invasion of Norway 9 April 1940 the Norwegian central bank had been one of the most independent in Western Europe. This article investigates the agency of the Norwegian central bank during the German occupation and compares it with central banks in other German occupied...

Persistent link: https://www.econbiz.de/10010787778

Did US consumers ‘save for a rainy day’ before the Great Recession?

Anundsen, André K.; Nymoen, Ragnar - Norges Bank - 2015

The 'saving for a rainy day' hypothesis implies that households' saving decisions reflect that they can (rationally) predict future income declines. The empirical relevance of this hypothesis plays a key role in discussions of fiscal policy multipliers and it holds under the null that the...

Persistent link: https://www.econbiz.de/10011277155

Government spending shocks and rule-of-thumb consumers: The role of steady state inequality

Natvik, Gisle James - Norges Bank - 2010

Galí, López-Salido, and Vallés (2007) suggest that because part of the population follow a rule-of-thumb by which they spend their entire disposable income each period, private consumption responds positively to defcitfinanced increases in government spending. Key to this result is a...

Persistent link: https://www.econbiz.de/10008490265

Fiscal stimulus in a credit crunch: the role of wage rigidity

Furlanetto, Francesco - Norges Bank - 2009

. The flexible wage version of the model implies strong expansionary effects on output and consumption but also a … and preserves the expansionary effects on output and consumption. Moreover, once we introduce segmentation in the labor …

Persistent link: https://www.econbiz.de/10004999337

Do re-election probabilities influence public investment?

Fiva, Jon H.; Natvik, Gisle James - Norges Bank - 2009

We identify exogenous variation in incumbent policymakers' re-election probabilities and explore empirically how this variation affects the incumbents' investment in physical capital. Our results indicate that a higher re-election probability leads to higher investments, particularly in the...

Persistent link: https://www.econbiz.de/10005009876

Social capital and the viability of stakeholder-oriented firms: Evidence from Norwegian savings banks

Ostergaard, Charlotte; Schindele, Ibolya; Vale, Bent - Norges Bank - 2009

Stakeholder oriented governance systems are often thought to hamper efficiency. We show that social capital improves the viability of stakeholder-oriented firms in competitive markets. Studying exits from the population of Norwegian savings banks after deregulations, we find that banks located...

Persistent link: https://www.econbiz.de/10005009877

Savers, Spenders and Fiscal Policy in a Small Open Economy

Matsen, Egil; Sveen, Tommy; Torvik, Ragnar - Norges Bank - 2004

This paper analyzes the effects of fiscal policy in an open economy. We extend the savers-spenders theory of Mankiw (2000) to a small open economy with endoge- nous labor supply. We first show how the Dornbusch (1983) consumption-based real interest rate for open economies is modified when labor...

Persistent link: https://www.econbiz.de/10005063075

Fiscal shocks and real rigidities

Furlanetto, Francesco; Seneca, Martin - Norges Bank - 2008

In this paper we show that empirically plausible results on the effects of fiscal shocks in Galí, López-Salido and Vallés (2007) rely on a high degree of price stickiness and a large percentage of financially constrained agents. Real rigidities in the form of habit persistence, fixed...

Persistent link: https://www.econbiz.de/10005063094