s title – does norway save too much? i will proceed by giving a few general perspectives on global current account imbalances. i will then turn to the question of how much oil producers should save – and the reasons for high saving in norway. graph : outline 1 / 6 bis central bankers'speeches why a surplus or deficit? the international capital market allows countries to decouple the size of savings from investments. the ability to run current account surpluses and deficits at different times facilitates a globally efficient capital allocation. in addition, it may help absorb country - specific shocks. deficits allow countries to finance productive investments. surpluses can generate higher returns than those available on domestic investments. and the possibility to smooth consumption is generally a benefit. graph : current account balance for norway norway is a prime example. our oil history started with the country running significant deficits, enabling large investments without the need to cut consumption correspondingly. deficits peaked at close to 12 percent of gdp in the 1970s, when the first investments in the oil industry were made. since then, we have mainly run surpluses, but our net international investment position turned positive as late as in the mid - 1990s, a quarter of a century after production began on the norwegian continental shelf. graph : current account balances global current account imbalances have increased since the late 1990s, as can be seen in this graph. if deficits persist over time, the financing of the debt can be challenging. high capital mobility increases the vulnerability of high - debt countries. unbalanced developments can undermine support for open trade and flexible markets, in turn also hurting surplus countries. in addition, both high deficits and significant surpluses may reflect policy and structural distortions that could hamper growth. a current account deficit or surplus can thus from both an individual - country and global perspective be either desirable or excessive, driven by distorted policies. to judge a given situation, we must therefore consider the fundamentals behind the imbalance. for producers of non - renewable resources, it is important to remember that although extraction of a depletable resource is counted as income in the national accounts, these revenues are of a special kind. it would in many ways be more meaningful to view them as transformation of wealth – from natural resources underground to financial assets abroad. we would expect such producers to run substantial current account surpluses during the production period. as the graph illustrates, this has also been the case, in particular in the 2000s, when oil

is now very low. the labour market is tight. unemployment has not been as low since the second half of the 1980s, and employment has risen sharply this year. wage - earners and enterprises have both fared well. cheap imported goods have resulted in a subdued rise in consumer prices and a substantial increase in wage - earners ’ real wages. high export prices have restrained the rise in real labour costs. combined with high productivity growth, this has resulted in high corporate earnings and solid growth in employment. at the same time, wage - earners share of corporate value added has been reduced, from around 75 per cent at the end of the 1980s to 70 per cent at the end of the 1990s, and now stands at below 65 per cent. solid productivity growth and high prices for export goods and deliveries to the petroleum sector have contributed to the reduction in the wage share over the past few years. the ample supply of labour has probably had a dampening effect on wage growth. increased globalisation may have provided greater opportunities for norwegian enterprises to relocate production to other countries if labour costs become too high. this probably places some restraint on wage demands among workers in sectors where enterprises have such opportunities. historically, a high wage share has tended to be accompanied by low unemployment. developments in recent years have provided the basis for strong growth in employment while the wage share has fallen. is it possible to sustain the combination of low unemployment and a low wage share? first, it partly depends on whether the positive supply - side conditions are sustained. there is probably symmetry here. should the terms of trade deteriorate, productivity growth slacken and foreign workers return to their home country, the wage share will increase, profits fall and unemployment increase. there is now a prospect of slower global growth. there are also signs that the strong growth in productivity that has been evident in other countries – for example in the us – is moderating somewhat. and we may see a similar trend in norway. second, even without a reversal, profits may fall and unemployment rise. the implications of this will depend on how far businesses, in their search for qualified labour, will go in bidding up wages. it will also depend on how wage - earners react and on their ability to adapt to change. furthermore, it must be expected that the strong krone will shave profits in some enterprises and industries at the moment, even though many have used currency hedging to safeguard their income. even though demand for labour is strong, there is