Pål Boug

• Dr. in Economics University of Oslo
• Statistisk sentralbyrå

The recent boom in house prices in many countries during the COVID-19 pandemic and the possibility of household financial distress are of concern among some central banks. We revisit the empirical modelling of house prices and household debt with a policy-oriented perspective using Norwegian data over the last four decades within the cointegrated V...

We analyse the behaviour of OPEC as a group by formulating a theoretical model that encompasses the perfect competition model and various forms of the imperfect competition model. By confronting the theoretical model with quarterly data for the period from 1992 to 2013 within the context of a cointegrated vector autoregressive (CVAR) model, we find...

A reasonable concept for the true trade price index in situations where low-price countries capture market shares from high-price countries is the average price paid by importers for the same quality of good or service from all exporting countries. However, decompositions of trade price indices are usually inexact in the sense that the average pric...

We formulate a general cointegrated vector autoregressive (CVAR) model that nests both a class of consumption Euler equations and various Keynesian‐type consumption functions. Using likelihood‐based methods and Norwegian data, we find support for cointegration between consumption, income and wealth once a structural break around the time of the fin...

We present a new methodology for calculating the real return on sovereign wealth funds (SWF) that share the investment objective of maximizing international purchasing power in terms of goods and services. Specifically, we modify the traditional approach for deflating the nominal return along three dimensions: the aggregator formula, the measure of...

We evaluate the empirical performance of forward-looking models for inflation dynamics in a small open economy. Using likelihood-based testing procedures, we find that the exact formulation is at odds with Norwegian data. Moreover, some of the parameters in the model are not well identified. We also find that the inexact formulation is not rejected...

The degree of exchange rate pass-through to domestic goods prices has important implications for monetary policy in small open economies with floating exchange rates. Evidence indicates that pass-through is faster to import prices than to consumer prices. Price setting behaviour in the distribution sector is suggested as one important explanation....

Studies on the relationship between exchange rates and traded goods prices typically find evidence of incomplete pass-through, usually explained by pricing-to-market behaviour. Although economic theory predicts that incomplete pass-through may also be linked to the presence of non-tariff barriers to trade, variables reflecting such a link is rarely...

We evaluate the empirical performance of the new Keynesian Phillips curve (NKPC) for a small open economy using cointegrated vector autoregressive models, likelihood based methods and general method of moments. Our results indicate that both baseline and hybrid versions of the NKPC as well as exact and inexact formulations of the rational expectati...

Several authors have questioned the evidence claimed by Galí and Gertler (1999) and Galí et al. (2001) that a hybrid version of the new Keynesian Phillips curve approximates European and US inflation dynamics quite well. We re-examine the evidence using the vector autoregressive framework and likelihood based methods, paying particular attention to...

During the last decades Norwegian exporters have-despite various forms of exchange rate targeting-faced a rather volatile exchange rate which may have influenced their behaviour. Recently, the shift to inflation targeting and a freely floating exchange rate has brought about an even more volatile exchange rate. We examine the causal link between ex...

Previous studies on the relationship between exchange rates and traded goods prices typically find evidence of incomplete pass-through, usually explained by pricing-to-market behaviour. Although economic theory predicts that incomplete pass-through may also be linked to presence of non-tariff barriers to trade, variables reflecting such a link is r...

The forward-looking linear quadratic adjustment cost (LQAC) model has received attention when modelling prices. Empirical evidence supporting the model seems, however, ambiguous. We find that the LQAC-model is severely at odds with price data for Norwegian machinery exports also when the pure forward-looking rule is augmented by additional lags of...

This paper studies the impacts on Western European CO2 emissions of a reduction in Norwegian gas sales. Such impacts are due to changes in energy demand, energy supply, and environmental and political regulations. The gas supply model DYNOPOLY is used to analyse the effects on Russian and Algerian gas exports of a reduction in Norwegian gas supply....

This paper uses neoclassical theory as a foundation for modelling labour demand in Norwegian manufacturing. Applying the Johansen (1988,1991) methodology, we obtain a single cointegrating vector between employment, production, relative factor prices, total factor productivity and the stock of real capital. Normalised on employment, the estimated lo...

The present paper uses the model by Campbell and Mankiw (1991) to examine the Norwegian consumer behavior and the role of the financial deregulation during the 1980s. For quarterly data on non-durables and services, we estimate the fraction of current income consumers to be in the range of 37% and 75% before the financial deregulation. This evidenc...

Aggregation of international prices in empirical work is generally based on well known index number formulas. However, a common practice applying such formulas is the use of price indices rather than price levels for which data across countries are rarely available. Numerical calculations of price aggregates are therefore typically not able to full...