Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/209852 
Year of Publication: 
2005
Series/Report no.: 
Working Paper No. 2005/5
Publisher: 
Norges Bank, Oslo
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.
Subjects: 
Ricardian regime
price level determinacy
fiscal policy
nominal anchor
JEL: 
E60
E63
Persistent Identifier of the first edition: 
ISBN: 
82-7553-303-1
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper
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