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.

Norges Bank is one of few central banks publishing an interest rate fore- cast. This paper discusses how we derive and communicate the interest rate forecast. To produce the forecasts, the Bank uses a medium-sized small open economy DSGE model - NEMO. Judgments and information from other sources...