6533b7d7fe1ef96bd126847f
RESEARCH PRODUCT
A Long Term View on the Short Term Co-movement of Output and Prices in a Small Open Economy
Arngrim HunnesOla Honningdal Gryttensubject
InflationMacroeconomicssupplyoutputShort runeconomic historyNorwayInflation targetingmedia_common.quotation_subjectMonetary policySmall open economydemandCausalityTerm (time):Social science: 200::Economics: 210::Economics: 212 [VDP]business cyclesBusiness cycleEconomicspricesmedia_commondescription
- One assumption behind inflation targeting as objective for monetary policy is that inflation rates in the short run to some extent reflect output cycles. The present paper investigates the historical co-movements of output and prices for a small open raw material based economy, in this case Norway 1830 – 2006. Looking at contemporaneous movements we find more often negative correlations between the two variables than positive. The correlations do not give any evidence of causality. However, they may indicate that supply side shocks, often caused by the foreign sector, were more important for historical output cycles in Norway than assumed hitherto
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2012-02-01 | International Journal of Economics and Finance |