big problem of large bills, the bank of amsterdam and the origins of central banking. ” federal reserve bank of atlanta working paper 2005 – 16 ). large - value payments between banks are settled continuously in norges bank. see also lerbak, marie n. ( 2013 ) : “ om pengemengden ” [ on the money supply ], norges bank staff memo no. 14. a characteristic of money as a means of payment is its anonymous nature. before the use of money became common among ordinary people, payments usually took place in connection with commercial transactions, whether for goods or services, via networks from which it might be difficult to extricate oneself. the farmer was usually indebted to a town merchant, which resulted in dependency and an obligation to deliver a portion of his produce. labourers might receive partial payment for their efforts in kind, or at large mills, in scrip that could only be used for purchases in the company store. the monetisation of the economy, based on secure monetary values, severed many of these ties of dependency. with money in their pockets, accepted as legal tender everywhere, the farmer or labourer was able to choose. this is also freedom. nor did the party receiving payment, e. g. the town merchants to know more about the customer than that he had money in his pocket and could pay for the goods. eitrheim, ø. and l. f. øksendal ( forthcoming ) : on secure monetary values and freedom. bis central bankers ’ speeches in norway, the aim of shielding the monetary system from the government was already embodied in the constitution of norway adopted on 17 may 1814. the drafters of the constitution formulated the following in article 75 ( c ) : “ it devolves upon the storting... to supervise the monetary affairs of the realm ”. this provision strongly censured the danish king ’ s monetary policy during wartime. in future, representatives appointed by citizens, not the crown, were to have final responsibility for the monetary system. 27 the king ’ s scope for taxation by means of inflation was curtailed. the storting, which was supposed to meet every third year, was not equipped to assume day - to - day responsibility for the monetary system. “ someone ” had to do this on behalf of the storting. that “ someone ” became norges bank, which was established in 1814. the storting realised that the objectives of monetary policy

jan f qvigstad : seminar on bayesian econometrics ( esobe ) – opening remarks opening remarks by mr jan f qvigstad, deputy governor of norges bank ( central bank of norway ), at the fourth annual meeting of the european seminar on bayesian econometrics ( esobe ), norges bank, oslo, 22 august 2013. * * * good morning everyone! it is a privilege for me to welcome you to this year ’ s european seminar on bayesian econometrics, which has attracted the interest of such a distinguished group of international scholars. i would like to extend a special welcome to those of you who have traveled far in order to be here today. as a practitioner of economic policy, i have experienced the use of economic models for almost half a century. back in the late 1970s, the norwegian ministry of finance used a large input - output model to calculate the effects of fiscal policy. somewhat contrary to common sense – even then – the model suggested that an increase in government spending would reduce inflation. to remedy this obvious mistake, we calibrated a new model – using our priors on critical parameters – to get results that were more consistent with our experience. the lesson i take away from this is the following : to be useful, models need to be consistent with the view of the world that we apply to policy. this consistency principle, in my view, lies at the heart of the progress made possible by bayesian modeling. advances in the last two decades have made bayesian econometrics a key tool for central banks. norges bank has benefited greatly from this, and two of our most important policy tools are results of such advances. nemo ( norwegian economy model ) is our estimated dsge model. the model is based on international research and model development over the past 20 years. we use it to produce forecasts and guide monetary policy analysis. this year, the hype is “ forward guidance ”. the fed does it, the bank of england does it, and the ecb also. we have done it since 2005. we publish forecasts of the key policy interest rate and nemo has been essential for the construction and, above all, explanation. when i describe norges bank ’ s policy decision at press conferences, i often refer to nemo equations in order to explain our decisions. our second key policy tool is our system of averaging models, sam. the short - term forecast from sam