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Fagseminar: Petroleum prosperity and housing prices in Norway

Handelshøgskolen ved UiS arrangerer åpent fagseminar med stipendiat Anne-Britt Halonen som vil presentere sin artikkel: Petroleum prosperity and housing prices in Norway

Handelshøgskolen ved UiS ønsker alle interesserte velkommen til åpent fagseminar tirsdag 8. desember kl 11:00-12:00 med HHUiS-stipendiat Anne-Britt Halonen.

Halonen vil presentere sin artikkel "Petroleum prosperity and housing prices in Norway"


Abstract:

Windfall revenues in resource-rich economies raise the risk of repressed economic growth via Dutch disease and resource curse mechanisms. The standard piece of policy advise is that social planners should exploit financial markets to separate the accrual of resource revenues from the dispersal of the same revenues. Such a prescription requires that saving and spending decisions among households are independent of shocks to net government wealth, which again is at stake with the hypothesis of Ricardian Equivalence. Based on time series data for Norway, we present an econometric assessment of the relationship between government financial wealth, household credit, and housing prices. Our results suggest that oil price shocks to government wealth tend to stimulate both household borrowing and housing price inflation. With wealth effects on private consumption, the implication is that oil fund mechanisms and rule-based fiscal policies are not necessarily sufficient to shelter the non-resource economy from resource-related shocks.