influenced by changes in prices for export goods and import goods in the two countries. in the 10 years to 1983, the norwegian krone showed a particularly strong appreciation against the swedish krona. this occurred at the same time as norway experienced far more favourable developments in prices for its export goods relative to import goods than was the case for sweden. norway ’ s terms of trade improved. in the 1970s, the sharp rise in oil prices contributed to this. in practice, the appreciation of the norwegian krone against the swedish krona occurred when the swedish authorities devalued their currency more than the norwegian authorities. the authorities devalued against a basket of currencies. in sweden, the palme government ’ s devaluation of 16 per cent in october 1982 was particularly strong. finland responded by devaluing its currency by 6 per cent. in norway, industrial leaders and industry organisations also pressed in favour of a devaluation of the norwegian krone. norway ’ s finance minister rolf presthus characterised the swedish decision as a serious setback for nordic cooperation3, and chose not to change the value of the norwegian krone. in much of the 1970s and 1980s, economic policy in norway and sweden lacked a long - term approach and credibility. this contributed to wide swings in production and employment. with a policy of low interest rates and devaluation, inflation became entrenched at a high level. frequent devaluations in the period following 1976 could not prevent a weakening of the manufacturing sector in the long run. on the contrary, they proved to be self - reinforcing. the wide fluctuations culminated in a borrowing spree that started in the mid - 1980s, first in norway and then in sweden. the borrowing spree was succeeded by deep economic crises. both norway and sweden had to abandon their fixed exchange rate policy in 1992. important reasons were freer capital flows, deeper financial markets and hence a surge in cross - border capital movements. sweden switched to inflation targeting in 1993 and was among the first countries to introduce a system that would later become the norm for small and medium - sized economies. the riksbank succeeded fairly quickly in anchoring inflation expectations and keeping inflation low and stable in sweden. norway followed suit in march 2001. with floating exchange rates, the exchange rate may adapt to changes in growth prospects and changes in the terms of trade. since the end of the 1990s the swedish krona has depreciated against the norwegian krone.

return over a period of 15 years will be negative would also increase somewhat, although not markedly. i have included this comment because these kinds of assessment are central to the choice of investment strategy for a fund such as the petroleum fund. long - term plan the petroleum fund is a very long - term savings plan. the notion of a fund arose in the early 1980s, and the fund was adopted in 1990 before the government had received any positive net cash flow from petroleum activities. up to 1995, government investments in petroleum activities were so large that all the revenues were used for investment and to cover budget deficits during the recession around 1990. now we have ten years of a rapidly expanding fund behind us. ahead of us, we still have at least 50 years, and perhaps more, where the petroleum fund or the pension fund will, i hope and believe, be an important part of the norwegian economy. every year, the calculations are based on the market assumptions that formed the basis of our most recent review of the investment strategy for the petroleum fund. 7 / 8 the storting will have to decide the scale of petroleum revenue spending over the central government budget. there is a long time ahead before the savings plan has been carried through. 8 / 8