single-authored, paper coming soon

Abstract:

I  estimate dynamic intensive-margin responses of income from tax changes by using legislated changes in marginal and average tax rates across the income distribution. Using instrumented variation in both marginal and average tax rates in Norway, I find that individuals adjust fully to these long-run income changes after three years.

The results indicate that income effects dominate substitution effects, consistent with current evidence on long-run labour supply. I further document that the income effect increases monotonically with consumption. Finally, I discuss implications for preference specifications and long run intensive labour supply.

with Martin B. Holm and Knut W. Heimdal, paper coming soon

Abstract:

We estimate local government spending multipliers using administrative data in Norway. Based on identified municipality fiscal policy shocks together with a reform in the municipality income system  we estimate the heterogeneous dynamic response of gross product across geographical units and sectors of the economy. We show that the multipliers increase with the home bias in consumption. The results indicate that spending multiplier is closely linked to import leakages . We observe that the public sector is the first to be affected by public spending, before the multiplier builds up in the private sector.  We build a model consistent with our findings to interpret our results. 

Economic Analysis and Policy, 2025 (with Ragnar Nymoen, Bilal Sali and Gunnar Bårdsen) 

Published version

Abstract:

The paper documents an empirical model of the joint effects on health and the economy of the COVID-19 virus in Norway. The model is an extension of the econometric framework which has been used for real time forecasting of new cases and hospital beds during the pandemic. An important premise for modelling has been the extension of the daily measurement system to include daily indicators of economic activity.  We build on existing methods for temporal disaggregation, and ``dailylize’’ the monthly GDP data by the use of a daily Financial News Index. We distinguish between awareness effects and the effects of endogenous changes in containment policies.  We find significant effects on the economy through both channels. We also find that the effects of containment policies were more negative in 2020 than later in the pandemic. A plausible explanation is that firms, household and government learned how to adapt to the pandemic.

Sammendrag:   

Under frontfagsmodellen har partene i arbeidslivet mandat til å sette en riktig lønn for landet, mot at politikerne og sentralbanken sørger for at arbeidsledigheten blir så lav som mulig, gitt at arbeidsmarkedet er en del av en deregulert, internasjonal økonomi. Den fagøkonomiske litteraturen om finans- og pengepolitikk, er likevel i stor grad basert på teorien om naturlig ledighetsrate. Den tilsier at den normale ledighetsraten ikke påvirkes av endringer i samlet etterspørsel, herunder fra økonomisk politikk. Det betyr at ledigheten på lang sikt hverken kan bli vesentlig lavere eller vesentlig høyere enn et normalt nivå som i stor grad er markedsbestemt. I så fall hverken kan eller bør makroøkonomisk politikk prøve å gjøre mer enn å jevne ut naturlige fluktuasjoner rundt det naturlige ledighetsnivået. Denne artikkelen argumenterer for at den koordinerte lønnsdannelsen påvirker sentrale mekanismer i norsk økonomi som muliggjør at finans- og pengepolitikken kan innrettes mot en lavere arbeidsledighet enn den markedsbestemte, uten å resultere i akselererende inflasjon og/eller ukontrollert tap av konkurranseevne. 

Publisert versjon