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Need to keep the interest rate high
Get PDFIntroductory statement by Governor Ida Wolden Bache at the event in Arendal following announcement of the policy rate on 15 August 2024.publishedVersio
Stock market wealth and entrepreneurship
Get PDFWe use data on stock portfolios of Norwegian households to show that stock market wealth increases entrepreneurship by relaxing financial constraints. Our research design isolates idiosyncratic variation in household-level stock market returns. An increase in stock market wealth increases the propensity to start a firm, with the response concentrated in households with moderate levels of financial wealth, for whom a 20 percent increase in wealth due to a positive stock return increases the likelihood to start a firm by about 20%, and in years when the aggregate stock market return in Norway is high. We develop a method to study the effect of wealth on firm outcomes that corrects for the bias introduced by selection into entrepreneurship. Higher wealth causally increases firm profitability, an indication that it relaxes would-be entrepreneurs’ financial constraints. Consistent with this interpretation, the pass-through from stock wealth into equity in the new firm is one-for-one.publishedVersio
Behov for å holde renten oppe
Get PDFSentralbanksjef Ida Wolden Baches innledning om rentebeslutningen på arrangement i Arendal 15. august 2024.publishedVersio
Tidspunktet for å sette renten ned nærmer seg
Get PDFSentralbanksjef Ida Wolden Baches innledning på pressekonferanse om rentebeslutningen 19. september 2024.publishedVersio
Monetary Policy Report 1/2024
Get PDFAt its meetings on 5 and 13 March 2024, the Committee discussed the economic outlook and the monetary policy stance. On 20 March, the Committee decided on the policy rate, on the basis of the deliberations and a recommendation from Norges Bank staff. The Bank’s monetary policy strategy describes the Committee’s interpretation of the monetary policy mandate and provides a framework for the Committee’s assessment of how monetary policy will respond to different shocks.
At its meeting on 20 March, Norges Bank’s Monetary Policy and Financial Stability Committee decided to keep the policy rate unchanged at 4.5 percent. Based on the Committee’s current assessment of the outlook and balance of risks, the policy rate will likely be kept at that level for some time ahead.publishedVersio
Details on the models discussed in the box “A weaker krone exchange rate pushes up inflation – but by how much?” Monetary Policy Report 3/24
Get PDFThis Analytical Note provides a detailed description of the three empirical models used in the
box on exchange rate pass-through in MPR 3/24, pages 42-45.publishedVersio
The drivers of emission reductions in the European carbon market
Get PDFThis paper studies the drivers of emission reductions in the carbon market of the European Union Emission Trading System (EU ETS) since its inception in 2005. We introduce a novel empirical framework that facilitates the joint identi cation of simultaneous demand and supply shocks underlying the European carbon market. We find that emission supply restrictions of the EU ETS were the dominant driver of emissions reductions, reducing emissions by 46%. However we also find that two opposing emission demand factors also played an important role. Demand from industrial economic activity increased emissions by 15%, while other demand-side factors, primarily reflecting the transition to low-carbon economies, reduced emissions by 21%.publishedVersio
Macroeconomic effects of fiscal policy under an energy supply shock
Get PDFWe study the potential effects on the real economy and welfare of four fiscal policy responses to an energy supply shock: energy vouchers to all households, only to lowincome households, or to non-energy goods producers, and subsidies for investments in the energy sector. The analysis relies on a DSGE model that explicitly models the energy sector. Calibrating the model to Swedish data, our results show that the subsidy for the investment in energy sector is the most effective instrument to reduce the energy price in the short- to medium term. This policy is, however, welfare dominated by energy vouchers given to households as it immediately compensates low-income, non-saving households in the event of the shock. Giving the energy voucher to the non-energy firms prevents energy prices from falling as fast as they would without policy intervention. It is also the least desirable from a welfare perspective.publishedVersio