Birger Strøm

Quantifying central hypotheses on Environmental Kuznets Curves for a rich economy : a computable general equilibrium study

We investigate whether the future relationships between several pollutants and per capita income in rich countries may assume the inverted U-forms of Environmental Kuznets Curves (EKC). The emission-augmenting effect of scaling up aggregate economic activity can be counteracted by greener composition of production and consumption, technological progress, and increased demand for environmental quality and policy. To quantify the importance of these central hypotheses, we use a CGE model with endogenous policy for Norway. Our results suggest significant future effects of all these three counteracting mechanisms. For most local and regional pollutants, they may be strong enough to prolong the falling emission trends. However, we cannot rely on reductions in emissions of climate gases and some transport-related local pollutants. Our results also indicate that pollution leakages abroad are likely to take place. Copyright (c) Scottish Economic Society 2003.

Fiscal effects of the Norwegian pension reform. A micro-macro assessment

The main goal of the Norwegian pension reform of 2011 is to improve long run fiscal sustainability, not least through stronger labour supply incentives. We assess to what extent the reform is likely to live up to these intentions. To this end we combine a dynamic microsimulation model, which includes a complete description of the Norwegian population and the pension system, with CGE-modelling of the effects on all government revenues and expenditures. We find that the reform is likely to make a great fiscal impact in the long run, and higher employment plays an important role in this respect. However, the pension reform alone is far from enough to solve the Norwegians long run problem of fiscal sustainability.

Computable General Equilibrium Assessments of Fiscal Sustainability in Norway

The chapter demonstrates how the computable general equilibrium model MSG6, combined with special models of government expenditures, has been used to assess the long-run fiscal sustainability in Norway. The simulations suggest that Norway faces a severe fiscal sustainability problem in the long run, despite an exceptionally strong fiscal position at present. This result is found to be relatively robust to exogenous variations in productivity growth, petroleum prices, longevity, immigration and the health of the elderly. The chapter also discusses the fiscal effects of various policy responses, including the pension reform of 2011, improvements in the standards of public health services and care for the elderly, as well as a tighter fiscal policy rule. The simulation experiments demonstrate that general equilibrium mechanisms contribute significantly to the total effects.