is tiny by comparison with the empirical research on the economies of other regions of the world. i will highlight one topical example to illustrate this point. since the global financial crisis triggered recession in many parts of the world, the efficacy of fiscal policy as a countercyclical tool to stimulate aggregate demand has been at the forefront of the macroeconomic policy debate in many countries. researchers, in both academia and international institutions, have responded by applying rigorous econometric techniques to the empirical analysis of the relationship between fiscal policy and output under different circumstances ( the level of public debt, whether monetary policy is accommodative, etc ). this research, which has generally provided evidence that fiscal policy has standard keynesian effects in economies with negative output gaps, has undoubtedly advanced scientific knowledge in this area, and this advance in knowledge has begun to influence the policy debate in the advanced countries. bis central bankers ’ speeches fiscal policy has also been used as a countercyclical tool in some african countries to offset the negative impact on domestic economies of the global economic crisis. however, in contrast to the advanced countries, there has as yet been virtually no empirical analysis conducted on african economies to guide policymakers charged with setting fiscal policy as to whether, and what circumstances, fiscal policy might have the intended impact on output. fiscal policymakers have been forced to fall back on what economic theory tells them should happen, even though the theory itself provides no unequivocal answers. what can we do to increase the volume of high quality empirical research on african economies? first, we need to strengthen the training of african economists at the post graduate level in econometric research techniques. the african economic research consortium is making a valuable contribution to this endeavour and is giving incentives to african researchers to undertake and publish their research. second, we need to make more resources available to fund research in african universities and research institutes. third, we need to improve the quality and availability of economic data. there is no doubt that econometric analysis of african economies is severely hampered by the paucity of reliable data, especially high frequency economic data. as a result, estimating time series relationships is often very difficult. data on some of the key variables in these relationships, such as gdp, are often lacking at the frequency which is required for estimation. unfortunately, i think that national account statistics have not always been given the priority that they deserve by the statistical bureau in many african countries. the quality and quantity of econometric research on african

øystein olsen : use of models and economic theory in norges bank lecture by mr øystein olsen, governor of norges bank ( central bank of norway ), at the department of economics, university of oslo, oslo, 8 september 2011. * * * the lecture is based on previous speeches and newspaper articles. a brief comment on recent developments is included in the final section. please note that the text below may differ slightly from the actual presentation. allow me to start by thanking you for your invitation to give this year ’ s schweigaard lecture. anton martin schweigaard was one of the leading statesmen of 19th century norway. he was a jurist, a politician and an economist. although “ revival of productive forces ” and “ expansion of national wealth ” were to schweigaard important objectives for economic policy, most important was the promotion of “ moral progress ”, “ public decency ” and “ the perfection of political and legal institutions ”. 1 i doubt that schweigaard was always impressed by the perfection of political institutions, perhaps in particular the institution of norges bank. schweigaard grew up in modest circumstances in the small market town of kragerø on the coast of southern norway – a town severely affected by the british blockade of norway during denmark - norway ’ s involvement in the napoleonic wars in the early 1800s. norges bank was established in 1816, the year after the wars ended. the storting decided that a compulsory silver tax would be levied to provide capital for norges bank. schweigaard ’ s brother wrote2 : “ when the compulsory payment to norges bank came in addition – anton and i witnessed our parents ’ silverware and gold ornaments being melted down to pay the tax – it is easy to understand that many of the town ’ s inhabitants found it difficult to make ends meet, which unfortunately was also the case with my parents and grandmother, and times were hard. ” but schweigaard was a talented man and it was said that he had probably never been as happy as when he passed his examen artium with flying colours and was admitted here to the university of christiania. i expect that as you embark on your economics studies, you will get down to business with the same energy and enthusiasm as schweigaard did then. i expect you will learn that economics is not a perfect subject. but i know that the study of economics will