in the interest rate in norway and a wider interest rate differential between norway and other countries may entail a risk of a stronger - thanprojected krone, resulting in an inflation level that is too low. this would indicate that the interest rate should not be raised too rapidly. monetary policy cannot fine - tune developments in the economy, but it can mitigate the most severe effects when the economy is exposed to shocks. overall, the outlook and the balance of risks suggest that the key policy rate should be gradually increased in the period ahead. the projections are uncertain. new information may reveal aspects of economic developments that suggest the norwegian economy is following a different path than projected. higher capacity utilisation or a weaker krone may, on the one hand, result in higher - than - projected inflation. on the other hand, inflation may be lower than projected if the krone remains strong or productivity picks up more rapidly. should the krone appreciate considerably more than projected, the interest rate may be increased to a lesser extent or later than currently envisaged. the key policy rate should be in the interval 1¼ - 2¼ per cent in the period to the publication of the next monetary policy report on 24 march 2010 unless the norwegian economy is exposed to new major shocks. thank you for your attention.

probably curb debt - financed investment. the question is whether this will eliminate the lowest priority investments. in the long run, we are dependent on long - term investment. interest rate changes may therefore have adverse effects in norway that do not occur in other countries. ” this stands in contrast to the current view, as expressed by norges bank ’ s delegating authority, the ministry of finance : 2 “ the new guidelines for economic policy also imply that monetary policy has been given a clear role in stabilising economic developments. this means that the scope for manoeuvre in monetary policy should be used if the outlook for the economy changes. ” in the 1950s and 1960s, a strong belief evolved that the economy could be controlled and steered in the desired direction. this optimistic view gradually lost favour in the face of developments. the way in which economic policy is oriented today reflects the experience gained and the lessons learned in the 1970s and 1980s. 3 economic policy at that time was marked by coordination, control and regulation. important elements were : • fiscal policy oriented towards full employment see jahn, gunnar, alf eriksen and preben munthe ( 1966 ) : norges bank gjennom 150 ar ( a history of norges bank ). in norwegian only. norges bank ’ s printing works, oslo. cf. report no. 1 ( 2003 - 2004 ) to the storting, national budget for 2004. ministry of finance, oslo. hermod skanland is in the process of completing “ doktriner og økonomisk politikk ” ( doctrines and economic policy ), which provides a very interesting discussion of post - war economic policy. • credit regulation within limits specified in a separate credit budget • channelling of loans through the state banks • regulation of capital movements • low nominal interest rates stipulated by the government authorities • a fixed, though adjustable, krone exchange rate • use of price regulation • an active business policy through state ownership and state grants and subsidies the use of price regulation was particular to norway. the following description is by petter jakob bjerve : 4 “ a characteristic of postwar norwegian economic policy, compared with policies in other countries in the west, is that prices have largely been directly set by the authorities, while wages and other income have been determined by the market and by market organisations. with the high level of employment that the government sought to achieve in the 1970s, inflation was probably lower with price regulation than it would have