Alternative Fiscal Rules for Norway

October 1, 2007

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Daniel Leigh, and Etibar Jafarov. Alternative Fiscal Rules for Norway, (USA: International Monetary Fund, 2007) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Aging, Oil, Oil prices, Oil, gas and mining taxes, Pension spending

Keywords: Budget, GDP, GPF assets, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/241
Stock No:

WPIEA2007241
ISBN:

9781451868043
ISSN:

1018-5941

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