## Alternative Fiscal Rules for Norway

_IMF Working Papers, October 1, 2007_

## Source details

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## Bibliographic details
- Authors: Daniel Leigh, Etibar Jafarov
- Published: October 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451868043.001

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### Overview and research question
- Authors: Daniel Leigh, Etibar Jafarov
- Date: October 1, 2007
- Core question: Long-term fiscal policy options in Norway in light of the substantial expected increase in pension outlays.
- Context: Norway is described as the world's fifth largest oil exporter.

### Current rule and alternatives analyzed
- Current fiscal rule:
  - Targets a (central government structural) non-oil deficit equal to 4 percent of Government Pension Fund assets.
- Alternatives:
  - Three alternative fiscal rules that save a larger share of oil revenue and accumulate more assets to pay for aging costs (each alternative is intended to increase asset accumulation relative to the current rule).

### Key findings and macroeconomic consequences
- Increased asset accumulation:
  - Accumulating more assets generates additional income.
  - The additional income generated from more assets allows lower tax rates.
  - Lower tax rates have positive effects on long-term output.
- Comparative implication:
  - The three alternatives save a larger share of oil revenue and accumulate more assets compared with the current rule targeting a 4 percent non-oil deficit.

### Policy implications and recommendations (implied by analysis)
- Consider adopting fiscal rules that save a larger share of oil revenue to build assets for future pension outlays.
- Use additional asset income to reduce tax rates to support higher long-term output.

### Publication and metadata
- Series: Working Paper No. 2007/241
- Issue: 241
- Volume: 2007
- Pages: 30
- DOI: https://doi.org/10.5089/9781451868043.001
- Stock No: WPIEA2007241
- ISBN: 9781451868043
- ISSN: 1018-5941
- Subjects: Aging, Oil, Oil prices, Oil, gas and mining taxes, Pension spending
- Keywords: budget, GDP, GPF assets, WP

*Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/alternative-fiscal-rules-for-norway-21395*

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## Content in this bundle

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/alternative-fiscal-rules-for-norway-21395_