The Norwegian Economy and Financial Stability

We …nd that housing prices depend on household borrowing, real disposable income and the housing stock in the long run, whereas real household debt is driven by the value of

The chart shows average annual growth in household real disposable income and in real house prices in selected countries, from 1999 to 2005.. Income figures for Norway are adjusted

In these time series studies, consumption elasticity is estimated at between 0 and 0.3, ie a 10 percent decline in house prices results in between 0 and 3 percent lower

The model implies that house prices will increase by 2-4 per cent per year in the period 2005-2007 if interest rates, unemployment, income and housing construction develop in line

If we assume a 3 percentage point increase in interest rates and a 30 percent fall in house prices, the calculations indicate that total household income available for consumption

For interest rates we present the after-tax income effect, for labor income we present the pre-tax income affect (as the tax varies individually), and for the drop in house prices

The model contains effects of the housing stock, the unemployment rate, banks' lending rates after tax, total wage income in the economy and an indicator of household

We started with a flexible dynamic model that contai- ned effects of house prices, the housing stock, the num- ber of house sales, banks’ lending rate after tax 8 , the