øystein olsen : navigating normalisation speech by mr øystein olsen, governor of norges bank ( central bank of norway ), at the bank of thailand – omfif high - level seminar, bangkok, 9 october 2018. * * * first, let me thank you for the opportunity to speak to you today. i am very happy to visit the bank of thailand and to participate on this panel. the financial crisis demanded powerful economic policy measures. monetary policy had to take on substantial responsibility, in norway as in many other countries. as we are hopefully heading for more normal times, it is important to evaluate our policy framework. our experience is that a flexible inflation targeting regime has helped dampen the impact on the real economy. in recent years, output and employment volatility has been relatively limited despite large shocks to the norwegian economy. the exchange rate has played an important role as a shock absorber, especially during the financial crisis and in periods when oil prices have fallen. at the same time, the interest rate level abroad places limitations on the room for manoeuvre in monetary policy in a small open economy like norway. our economy and economic policy before i elaborate on this, i would like to give you some background on my country. norway is a small country with a little more than five million inhabitants. the economy is open ; total imports and exports make up about 2 / 3 of gdp. the public sector benefits from the government ’ s large revenues from petroleum extraction, and although the direct employment effect is small, the impact on the overall economy is significant. these specific features of the norwegian economy are important concerns behind the framework for economic policy. fiscal policy is governed by a fiscal rule, designed to insulate public finances from oil price volatility. the government ’ s large petroleum revenues are channelled into the government pension fund global and the fund ’ s capital is invested abroad. the fiscal rule specifies that only the expected real return of the fund, on average over the cycle, is to be spent over public budgets every year. with this set - up, the fund also provides leeway for discretionary fiscal expansion when needed and enables future generations to benefit from norway ’ s petroleum revenues. monetary policy has targeted low and stable inflation since 2001. after an adjustment earlier this year, the operational target of monetary policy is now annual consumer price inflation of close to 2 percent over time. inflation targeting shall be forward - looking and flexible so that it can contribute to high

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