Question

What is Norway's Fiscal Policy? How does it relate or compare to the fiscal policy of countries in rest of the world?

Answer 1

Norway is oil dependent country. its revenue collection depends on oil prices in international market. Recent slide in oil price and which is likely to continue to move in same direction in future poses challenge to fiscal policy of Norway.

Fiscal policy is related to the policies of tax and expenditure of government. Now government is likely to use expenditure in most productive and efficient way to manage imbalances in expenditure and revenue of government.

Hence, fiscal policy of Norway is not expansionary as of now.

fiscal condition of Norway is relatively is different than that of other countries. US, UK etc are not dependent on oil for financing government expenditure. these countries have well diversified sources of revenue. Thus, US is not acting on line of Norway.