in norway. in recent years, we have also seen that many enterprises have moved large portions of their production abroad, particularly the most labour - intensive production. norwegian manufacturing companies could therefore remain profitable even if the size of the manufacturing sector in the norwegian economy is reduced. however, the scaling back of manufacturing also involves a risk. it makes the economy more vulnerable. the growth potential of the economy – the basis for learning, innovation and development – may be impaired when less of the business sector is exposed to intense foreign competition. over the last thirty years, manufacturing industry has been scaled back in waves. the sharpest declines were observed in the years between 1977 and 1984 and from 1987 to 1992. the declines were preceded by a deterioration in profitability in this industry. it may take time for a weakening to spill over to output and employment, but when the turnaround first occurs it takes place rapidly and on a large scale. primary industries, in contrast, are scaled back gradually. these developments will take place in addition to the effects associated with the increased spending of petroleum revenues. all in all, employment in manufacturing and agriculture may fall by some 50 000 - 100 000 person - years in the period to 2010. employment in the manufacturing sector may drop to below 250 000. in the agricultural sector, the number employed may be less than 50 000 person - years. changes in industry structure, with an increase in the number employed in services and a decrease in manufacturing, will probably reduce the role of pay increases in manufacturing as a benchmark for wage determination. wage formation and the labour market the structure of wage and income formation, the laws and rules governing the labour market and the social safety net are the main determinants of business costs and employment. if the cost level is too high, the business sector will find it unprofitable to employ everyone who wants to work. the business sector must restructure rapidly when real wages increase sharply. many activities will no longer be profitable and will be shut down. this could lead to higher unemployment. however, lower employment will not necessarily be reflected in unemployment figures. we may instead see a flow of discouraged workers into, for example, disability pensions, early retirement schemes or different types of adjustment packages. the extent to which these schemes are used will depend on financial incentives and entitlement thresholds. in many european countries unemployment has remained relatively high. by contrast, the us managed to reduce unemployment rapidly following the period of high unemployment early in the 1980s. the

assumption on which our projections are based, the fan charts represent the mpc ’ s best collective judgement about the most likely paths for inflation and output and the uncertainties surrounding those central projections. " the bank ’ s view of the outlook for the interest rate is not stated directly, but is implicit in the discussion of the fan around the inflation projection and an associated table. twelve monetary policy meetings are held each year. decisions taken are made public immediately, but without an explanation, and meetings are not followed by press conferences. two weeks after each meeting, the bank publishes minutes, which make it clear whether there was a lack of consensus in the committee. publication of the minutes is required by law. an account of the implementation of monetary policy is provided in the annual report. all committee members are free to express their personal views on economic issues and monetary policy. in sweden, too, interest rate decisions are made by a board of experts – the executive board. the members work full time, and participate in the daily operations of the central bank. an inflation report expressing the executive board ’ s collective view of the inflation outlook is published four times a year. as in the uk, special emphasis is placed on the individual responsibility of the executive board members. the individual members ’ voting and assessments are disclosed. any lack of consensus regarding the inflation outlook and setting of interest rates emerges from the minutes that are published from two to four weeks after each monetary policy meeting. grounds are given for decisions on interest rates, but no press conference is held immediately after monetary policy meetings. the executive board does not directly announce its stance regarding interest rate movements in the period ahead, but this is implicit from the uncertainty associated with the projection, which sweden ’ s riksbank also illustrates by means of a fan surrounding the inflation projection. the executive board reports twice a year to the swedish parliament, the riksdagen. sweden ’ s riksbank has chosen to use two of its four quarterly inflation reports for this purpose. members of the executive board give lectures and express their personal views on economic questions and monetary policy. in its december 2000 bulletin, the ecb presented for the first time price inflation projections in the form of a broad range. bank staff prepare the projections. in the ecb ’ s two - pillar system, developments in the first pillar, the money supply ( m3 ), and the second pillar, which comprises other factors that may influence price inflation, are equally important. according to the maastricht treaty