Arbeitspapier

The Historical Connection Between Short Term Output and Prices in a Small Open Economy

According to a Keynesian view, short term output fluctuations are normally demand side led. Since prices reflect demand, they should mirror output fluctuations. Thus, prices and output are expected to move in the same direction in the short run. The present paper investigates the historical co-movements of output and prices for a small open raw material based economy, in this case Norway 1830-2006. We find little evidence of a positive relationship. On the contrary, we rather find negative correlations between the two variables, indicating that supply side shocks through the foreign sector were more important for historical business cycles in Norway than assumed hitherto.

ISBN
978-82-7553-526-7
Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 2009/21

Classification
Wirtschaft
Price Level; Inflation; Deflation
Business Fluctuations; Cycles
Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative
Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: Europe: Pre-1913
Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: Europe: 1913-
Subject
business cycles
output
small open economy
price fluctuations

Event
Geistige Schöpfung
(who)
Grytten, Ola Honningdal
Hunnes, Arngrim
Event
Veröffentlichung
(who)
Norges Bank
(where)
Oslo
(when)
2009

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Grytten, Ola Honningdal
  • Hunnes, Arngrim
  • Norges Bank

Time of origin

  • 2009

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