Keynesian economics and the Oslo School

The economic crisis of the 1930’s hit Norway when Ragnar Frisch returned from the US to accept a professorship at University of Oslo. On his return he wrote newspaper articles proposing tax relief and monetary policies to fight the economic crisis. Frisch abandoned his monetary policies and developed his Oslo School emphasising mathematical models, econometrics, national accounts, and detailed state governance. For the next four decades this School dominated economic policy in Norway where market forces had been substituted with administrative decision making. Keynes, with his General Theory, pointed out that a market economy with an active government can secure full employment. When the ideas of the Oslo School were challenged at the end of the 1970’s, by academics and through the poor performance of the economy, it collapsed. A decentralised market economy was reintroduced and The Keynesian paradigm emerged as the preferred theory compared to the approach of the Oslo School.