Spillovers in the Nordic Countries

March 27, 2015

Preview Citation

Format: Chicago

Borislava Mircheva, and Dirk V Muir. Spillovers in the Nordic Countries, (USA: International Monetary Fund, 2015) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Denmark, Finland, Norway, and Sweden form a tightly integrated region which has strong ties with the euro area as well as some exposure to Russia. Using the IMF’s Global Integrated Monetary and Fiscal model (GIMF), we examine spillovers the region could face, focusing on possible scenarios from the rest of the euro area and Russia, and the fall in global oil prices. We show that the spillovers from these scenarios differ in magnitude and impact, regardless of the high degree of integration among the four Nordic economies. These differences are driven by the fact that Denmark and Finland have no independent monetary policy, and Denmark and Norway are net energy exporters while Finland and Sweden are energy importers. We infer lessons for policy from the outcomes.

Subject: Asset and liability management, Consumption, Energy prices, Energy pricing, Expenditure, National accounts, Oil prices, Prices, Real exchange rates, Sovereign wealth funds

Keywords: Area imports, Consumption, Demand share, Demand share of the oil price decrease, Dynamic stochastic general equilibrium models, Energy prices, Energy pricing, Euro, Euro area, Europe, Finland, Fiscal policy, GDP reduction, Global, Investment demand, Mainland real GDP, Mainland real GDP trough, Monetary policy, Monetary policy in Denmark, Monetary policy response, Nordic countries, Norway's mainland real GDP trough, Oil price drop, Oil prices, Price, Real GDP, Real GDP trough, Sovereign wealth funds, Spillovers, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/070
Stock No:

WPIEA2015070
ISBN:

9781475554106
ISSN:

1018-5941

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