The output gap is a crucial concept in the monetary policy framework, indicating demand pressure that generates inflation. However, its definition and estimation raise a number of theoretical and empirical questions. This paper evaluates a series of univariate and multivariate methods for...

We estimate a small open-economy DSGE model for Norway with two specifications of monetary policy: a simple instrument rule and optimal policy based on an intertemporal loss function. The empirical fit of the model with optimal policy is as good as the model with a simple rule. This result is...

Based on high-frequency data for Norway and Sweden, we investigate to what extent explicit forward guidance from monetary policy makers, by means of publishing the path of expected future policy rates, affects the market yield curve. We summarise movements in the yield curve by two latent...

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.

Based on the established literature, we develop a structural model for the Norwegian economy that incorporates feed-backs from asset prices and credit to the real economy. We then use this framework for policy analysis, focusing on the role of asset prices and credit under optimal simple...

In this paper, we estimate the neutral real rate for the Norwegian economy using two different empirical models, a vector autoregressive model with time-varying parameters (TVP-VAR) and a State-Space (SS) model similar to the Laubach-Williams model, respectively. In line with international...

In this paper, we estimate various dynamic wage equations for mainland Norway. Our starting point is a standard Phillips curve. We then expand on our baseline specification by adding explanatory variables suggested by economic theory. In our preferred specification, the labor share plays the...