Carbon taxes and Macroeconomic dynamics in Norway

Prince Anienwe and Keshab Bhattarai

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the long-term equilibrium relationships between Norway's carbon tax policy and key macroeconomic indicators using Johansen cointegration analysis and the Vector Error Correction Model (VECM). The findings show that Norway's carbon tax raises inflation and lowers investment over time, but does not impact GDP. These findings, based on cointegration and VECM analysis of carbon tax, GDP, investment, and inflation from 1995 to 2023, enhance understanding of how carbon taxes affect Norway's macroeconomy.

Keywords: Carbon Tax; Cointegration; Vector Error Correction Model; GDP; Inflation; Investment. (search for similar items in EconPapers)
JEL-codes: C22 E22 Q54 Q58 (search for similar items in EconPapers)
Date: 2026-01-12, Revised 2026-01-12
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:127742

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