Is the price level in Norway determined by fiscal policy?

Ragna Alstadheim ()

No 2005/5, Working Paper from Norges Bank

Abstract: The Norwegian public sector has net financial assets. The fiscal theory of price determination applies equally to Norway and economies with net public debt: If primary surpluses evolve independently of nominal debt (or assets), the price level has to adjust to satisfy the intertemporal budget constraint of the public sector. In this ‘non-Ricardian’ regime, monetary policy cannot provide the nominal anchor. In the alternative ‘Ricardian’ regime, surpluses respond to debt, and monetary policy is the nominal anchor. The plausibility of NR regimes is disputed. I use fiscal data and oil prices to argue that the Norwegian regime is Ricardian. The fiscal theory of price

Keywords: Price-level determinacy; fiscal policy; Richardian regime; nominal anchor (search for similar items in EconPapers)
JEL-codes: E60 E63 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2005-08-19
New Economics Papers: this item is included in nep-mac, nep-mon and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.norges-bank.no/globalassets/upload/imp ... /pdf/arb-2005-05.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bno:worpap:2005_05

Access Statistics for this paper

More papers in Working Paper from Norges Bank Contact information at EDIRC.
Bibliographic data for series maintained by ().