A seminar will take place at the Central Bank of Iceland, in the meeting room Sölvhóll, on Friday 29 November at 14:00.

Speaker: Arnaldur Sölvi Kristjánsson, Economist at the Ministry of Finance in Norway.

The Effects of Fiscal Policy in Norway

Abstract: In the seminar the speaker will present the results from a recent study on the effects of fiscal policy on the Norwegian economy. The effects of taxes and public spending on GDP are estimated using time-series models. The estimation is based on a methodology developed by Olivier Blanchard and Roberto Perotti. During the last 15 years a number of researchers have used this methodology to estimate the effects of public finances on the economy, but there are very few such analyses that have used Norwegian data. This analysis indicates that in Norway this methodology is suitable for estimating the effects of changes in public expenditure. The expenditure multiplier, i.e. the change in GDP when public expenditure is increased by 1 krona, is between 0.3-0.5. This estimate is somewhat lower than the estimates obtained in similar studies in other countries. The estimate of the revenue multiplier is rather inaccurate.

The paper is available here.