IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2007-241.html
   My bibliography  Save this paper

Alternative Fiscal Rules for Norway

Author

Listed:
  • Mr. Daniel Leigh
  • Mr. Etibar Jafarov

Abstract

This paper considers long-term fiscal policy options in Norway, the world's fifth largest oil exporter, in light of the substantial expected increase in pension outlays. It compares the current fiscal rule, which targets a (central government structural) non-oil deficit equal to 4 percent of Government Pension Fund assets, with three alternatives that save a larger share of oil revenue and accumulate more assets to pay for aging costs. It also analyzes the macroeconomic consequences of accumulating more assets, finding that the additional income generated from more assets allows lower tax rates, with positive effects on long-term output.

Suggested Citation

  • Mr. Daniel Leigh & Mr. Etibar Jafarov, 2007. "Alternative Fiscal Rules for Norway," IMF Working Papers 2007/241, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/241
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=21395
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dennis Fredriksen & Nils Martin Stølen, 2005. "Effects of demographic development, labour supply and pension reforms on the future pension burden," Discussion Papers 418, Statistics Norway, Research Department.
    2. International Monetary Fund, 2005. "Norway: Selected Issues," IMF Staff Country Reports 2005/197, International Monetary Fund.
    3. Mr. Douglas Laxton & Mr. Michael Kumhof, 2007. "A Party without a Hangover? On the Effects of U.S. Government Deficits," IMF Working Papers 2007/202, International Monetary Fund.
    4. Bernard Casey & Howard Oxley & Edward Whitehouse & Pablo Antolín & Romain Duval & Willi Leibfritz, 2003. "Policies for an Ageing Society: Recent Measures and Areas for Further Reform," OECD Economics Department Working Papers 369, OECD Publishing.
    5. Benoît Bellone & Alexandra Bibbee, 2006. "The Ageing Challenge in Norway: Ensuring a Sustainable Pension and Welfare System," OECD Economics Department Working Papers 480, OECD Publishing.
    6. Mr. Jan-Peter Olters & Mr. Daniel Leigh, 2006. "Natural-Resource Depletion, Habit Formation, and Sustainable Fiscal Policy: Lessons from Gabon," IMF Working Papers 2006/193, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:zbw:bofrdp:2008_021 is not listed on IDEAS
    2. Kinnunen, Helvi, 2008. "Government funds and demographic transition : alleviating ageing costs in a small open economy," Research Discussion Papers 21/2008, Bank of Finland.
    3. Mr. Jens R Clausen, 2008. "Calculating Sustainable Non-mineral Balances as Benchmarks for Fiscal Policy: The Case of Botswana," IMF Working Papers 2008/117, International Monetary Fund.
    4. Segal, Paul, 2012. "How to spend it: Resource wealth and the distribution of resource rents," Energy Policy, Elsevier, vol. 51(C), pages 340-348.
    5. Torfinn Harding & Frederick Van der Ploeg, 2009. "Is Norway's Bird-in-Hand Stabilization Fund Prudent Enough? Fiscal Reactions to Hydrocarbon Windfalls and Graying Populations," CESifo Working Paper Series 2830, CESifo.
    6. Erixon, Lennart, 2011. "Under the influence of traumatic events, new ideas, economic experts and the ICT revolution - the economic policy and macroeconomic performance of Sweden in the 1990s and 2000s," Research Papers in Economics 2011:25, Stockholm University, Department of Economics.
    7. Barry Eichengreen & Ugo Panizza, 2016. "A surplus of ambition: can Europe rely on large primary surpluses to solve its debt problem?," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 31(85), pages 5-49.
    8. Kinnunen, Helvi, 2008. "Government funds and demographic transition: alleviating ageing costs in a small open economy," Bank of Finland Research Discussion Papers 21/2008, Bank of Finland.
    9. Kristina V. Shvandar & Vsevolod Y. Cherkasov & Tatiana F. Burova, 2017. "Dutch Disease: Applying the Budget Rule and the Role of Structural Reforms," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 20-32, October.
    10. Torfinn Harding & Frederick Ploeg, 2013. "Official forecasts and management of oil windfalls," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(5), pages 827-866, October.
    11. Lücke, Matthias, 2010. "Stabilization and savings funds to manage natural resource revenues: Kazakhstan and Azerbaijan vs. Norway," Kiel Working Papers 1652, Kiel Institute for the World Economy (IfW Kiel).
    12. Stuart Landon and Constance Smith, 2015. "Rule-Based Resource Revenue Stabilization Funds: A Welfare Comparison," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    13. Iacono, Roberto, 2017. "A comparison of fiscal rules for resource-rich economies," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 179-193.
    14. de Aguiar, Thereza R.S. & Freire, Fatima de Souza, 2017. "Shifts in modes of governance and sustainable development in the Brazilian oil sector," European Management Journal, Elsevier, vol. 35(5), pages 701-710.
    15. Wojciech Maliszewski, 2009. "Fiscal Policy Rules for Oil-Producing Countries: A Welfare-Based Assessment," IMF Working Papers 2009/126, International Monetary Fund.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. International Monetary Fund, 2007. "Norway: Selected Issues," IMF Staff Country Reports 2007/197, International Monetary Fund.
    2. Tetsuo Ono, 2015. "Public education and social security: a political economy approach," Economics of Governance, Springer, vol. 16(1), pages 1-25, February.
    3. García-Pérez, J. Ignacio & Jiménez-Martín, Sergi & Sánchez-Martín, Alfonso R., 2013. "Retirement incentives, individual heterogeneity and labor transitions of employed and unemployed workers," Labour Economics, Elsevier, vol. 20(C), pages 106-120.
    4. Zhang, Zhiwei & Zhang, Wenlang, 2011. "The road to recovery: Fiscal stimulus, financial sector rehabilitation, and potential risks ahead," Journal of Asian Economics, Elsevier, vol. 22(4), pages 311-321, August.
    5. Gomes, S. & Jacquinot, P. & Pisani, M., 2012. "The EAGLE. A model for policy analysis of macroeconomic interdependence in the euro area," Economic Modelling, Elsevier, vol. 29(5), pages 1686-1714.
    6. José Ignacio García & Alfonso R. Sánchez Martín, 2008. "Social security and the search behaviour of workers approaching retirement," Economic Working Papers at Centro de Estudios Andaluces E2008/10, Centro de Estudios Andaluces.
    7. Barbara Hanel & Regina Riphahn, 2006. "Financial Incentives and the Timing of Retirement: Evidence from Switzerland," Working Papers 009, Bavarian Graduate Program in Economics (BGPE).
    8. Alfonso R. Sanchez Martín & Virginia SanchezMarcos, 2010. "Demographic Change and Pension Reform in Spain: An Assessment in a Two-Earner, OLG Model," Fiscal Studies, Institute for Fiscal Studies, vol. 31(3), pages 405-452, September.
    9. International Monetary Fund, 2008. "Czech Republic: Selected Issues," IMF Staff Country Reports 2008/040, International Monetary Fund.
    10. Leeper, Eric M. & Plante, Michael & Traum, Nora, 2010. "Dynamics of fiscal financing in the United States," Journal of Econometrics, Elsevier, vol. 156(2), pages 304-321, June.
    11. Straub, Roland & Tchakarov, Ivan, 2007. "Assessing the impact of a change in the composition of public spending: a DSGE approach," Working Paper Series 795, European Central Bank.
    12. Michal Andrle & Patrick Blagrave & Pedro Espaillat & Ms. Keiko Honjo & Mr. Benjamin L Hunt & Mika Kortelainen & René Lalonde & Mr. Douglas Laxton & Eleonara Mavroeidi & Mr. Dirk V Muir & Susanna Mursu, 2015. "The Flexible System of Global Models – FSGM," IMF Working Papers 2015/064, International Monetary Fund.
    13. Martha A. Starr, 2006. "Macroeconomic dimensions of social economics: Saving, the stock market, and pension systems," Working Papers 2006-09, American University, Department of Economics.
    14. Mr. Daniel Leigh, 2008. "Achieving a Soft Landing: The Role of Fiscal Policy," IMF Working Papers 2008/069, International Monetary Fund.
    15. Bokan, N. & Gerali, A. & Gomes, S. & Jacquinot, P. & Pisani, M., 2018. "EAGLE-FLI: A macroeconomic model of banking and financial interdependence in the euro area," Economic Modelling, Elsevier, vol. 69(C), pages 249-280.
    16. Georgios Georgiadis & Saskia Mösle, 2020. "Introducing dominant‐currency pricing in the ECB's global macroeconomic model," International Finance, Wiley Blackwell, vol. 23(2), pages 234-256, August.
    17. repec:dau:papers:123456789/13160 is not listed on IDEAS
    18. Orban, Gabor & Szapary, Gyorgy, 2004. "The Stability and Growth Pact from the perspective of the new member states," Journal of Policy Modeling, Elsevier, vol. 26(7), pages 839-864, October.
    19. Frederick van der Ploeg & Anthony J. Venables, 2011. "Harnessing Windfall Revenues: Optimal Policies for Resource‐Rich Developing Economies," Economic Journal, Royal Economic Society, vol. 121(551), pages 1-30, March.
    20. Gonand, Frédéric & Jouvet, Pierre-André, 2015. "The “second dividend” and the demographic structure," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 71-97.
    21. Mr. Mark J Flanagan, 2008. "Resolving a Large Contingent Fiscal Liability: Eastern European Experiences," IMF Working Papers 2008/159, International Monetary Fund.

    More about this item

    Keywords

    WP; GDP; GPF assets; budget;
    All these keywords.

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2007/241. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.