Secondly, the terms of trade moved more or less in line with the terms of trade for other EU member states, ruling out  4  BIS Review 53/2002  external price shocks as an explanation. Hence, the roots of Danish output fluctuations are to be found among domestic factors.
Accordingly, the analysis does not carry over to an economy subject to large external shocks. The trough in 1981 had its origin in the very poor macroeconomic policies of the 1970s that can be summarised as traditional Keynesian demand stimulus to the oil-price shocks.