norwegian economy to a significant upward income shock. this has amplified the domestic upswing. so far, however, strong growth impulses have not led to major imbalances in the labour market or strong upward wage and price pressures. this may be seen as an indication that the macroeconomic framework, most notably the fiscal and monetary policy regimes, has been quite successful so far in shielding the norwegian economy from excessive fluctuations. more importantly, as long as we adhere to the macroeconomic framework, it will shield the economy when oil prices eventually fall and our terms of trade are reversed. thank you for your attention!

more than a decade after the financial crisis. the extraordinary measures that have been applied have also led to a substantial expansion of central bank balance sheets, and in a number of countries they are still expanding. in sweden and japan, the asset purchase programmes have not yet been brought to an end, and the european central bank has recently announced that its asset purchase programme will be restarted ( also note that japan has to have a separate graph in this chart ). unconventional instruments appear to have become a part of the ordinary central bank toolkit. we have more policy room for manoeuvre in norway as the policy rate has risen slightly. in the event of a severe downturn, we would lower the policy rate. in principle, other countries ’ experience shows that the impact of a lower policy rate does not stop at the zero lower bound, 6 / 9 bis central bankers'speeches even though the scope for rates below zero is limited. but in norway it is difficult to envisage negative rates over a long period or monetary policy being stretched even further through unconventional measures. even though such measures would probably have some effect here in norway, the potential gains must be weighed against the costs. norway also has fiscal room for manoeuvre. as i have mentioned, there is probably less to gain from lower long - term rates in norway than in countries that have used unconventional instruments to reduce rates. and the effects of such instruments are now also being called into question internationally. the costs are particularly related to financial stability. persistently low interest rates can induce investors to take on greater risk in the search for yield, bidding up the price of risky investments and pushing down yields to the level of risk - free interest rates. prices for securities and other assets can be pushed up higher than future income and risk would suggest. high debt ratios create vulnerabilities, increasing the risk of new crises and future losses. persistently lower interest rates can also hamper necessary structural changes and reduce the economy ’ s growth capacity. debt becomes easy to service, even for unprofitable enterprises. projects that generate low returns can be debt - financed. chart : fiscal impulses the strategy pursued by other countries of stretching the limits of monetary policy must be viewed in the light of monetary policy being practically the only instrument applied. fiscal policy has made a scant contribution or pulled in the opposite direction. there are probably a number of reasons why this is the case. for some countries with high government debt, the risk of rising