Linear dynamic equilibrium correction mechanisms are shown to follow from the discretisation of continuous economic processes with steady-state solutions. In addition, the proposed procedure on the coefficients of the dynamic econometric model.

Local redistribution policy creates incentives for welfare migration that may result in 'underprovision' or even a 'race to the bottom'. This paper evaluates the empirical importance of welfare competition. Our contribution is to separate between the policy decision and the actual welfare...

We provide an empirical analysis of regional risk sharing in Norway over the period 1977-90. The approach of Asdrubali, Sørensen and Yosha (1996) is extended to take account of public employment as a possible shock absorber. The other channels of risk sharing are capital markets & commuting,...

The paper presents an empirical test of local fiscal competition in Norway based on the observation that interregional migration during the business cycle creates very different incentives for rural and urban municipalities to influence population movements. Panel-data evidence is presented...

The paper tests whether or not the effects on sectoral wages of internal and external factors depend upon the sector’s relative wage position. The key hypothesis is that workers in low—wage sectors are more concerned with relative wages than workers in high wage sectors. To test the...

The paper provides an analysis of efficiency in the care for the elderly sector in Norway. In a first step we perform DEA analysis to calculate the degree of efficiency in each municipality and the national level efficiency potential. The analysis reveals substantial variation in efficiency...

This paper utilizes information on cognitive ability at age ten and earnings information from age 20 to 65 to estimate the return to ability over the life-cycle. Ability measured at an early age is not influenced by the individual’s choices of schooling and other circumstances. We find that...