“How synchronized are central and east European economies with the euro area? Evidence from a structural factor model”, Discussion Paper 20/2005, Deutsche Bundesbank Estrada, A., López-Salido, D. 2001. “Understanding Spanish Dual Inflation”, Documento de Trabajo n.º 0205 Banco de España Fidrmuc J., Korhonen I. 2001 “Similarity of Supply and Demand Shocks between the Euro Area and the CEECs”, BOFIT Discussion Paper No. 14. Financial Times “EU’s grim climate change”, 6 January 2007. Gourinchas, P.O., Valdes, R., Landerretche, O. 2001. “Lending Booms: Latin America and the World”, NBER Working Paper 8249. Kenen, Peter B. (2002) “Currency Unions and Trade: Variations on Themes by Rose and Persson” Reserve Bank of New Zealand Discussion Paper 2002/08. Kiss, G., Nagy, M., Vonnák, B. 2006. “Credit Growth in Central and Eastern Europe: Convergence or Boom?”, WP 2006/10, Magyar Nemzeti Bank. Micco, A., Stein, E., Ordonez, O. 2003. “The Currency Union Effect on Trade: Early Evidence From EMU”, Economic Policy, 316-356. NBP 2004. “A Report on the Costs and Benefits of Poland’s Adoption of the Euro”, ed. J.Borowski, National Bank of Poland Persson, Torsten (2001) “Currency Unions and Trade: How Large is the Treatment Effect?”, Economic Policy 33, 435-448. Rose A.K. (2000): One Money, One Market? The Effect of Common Currencies on International Trade, „Economic Policy” No. 30, pp. 449-461. Rose A.K., van Wincoop E. (2001): National Money as a Barrier to International Trade: the Real Case for Currency Union, „American Economic Review” Vol. 91, No. 2, s. 386-390. Mundell R. (1961): A Theory of Optimum Currency Areas, „American Economic Review” Vol.
An inflation target was adopted and the krona was allowed to float free. In Norway, the situation was somewhat different. The Norwegian krone had not depreciated as much when Norway left the exchange rate mechanism. Norway therefore returned to a fixed exchange rate regime, although this regime gradually changed and in 2001 Norges Bank also formally adopted an inflation target and a new fiscal framework was introduced. So our two countries have had a similar strategy for monetary policy based on an inflation target and a floating exchange rate since 2001. During this period there have been frequent and deep contacts between our staff, and I am thankful for all that we at Sveriges Riksbank have learned from these exchanges of methodologies and other experiences. However, the emergence of Norway as an oil nation has made Norges Bank unique in many respects, not least in managing a sovereign wealth fund. Norges Bank is one of very few central banks charged with such a task. In fact, this fund is one of the largest investors on the Swedish stock exchange. When Norway became an oil nation in the 1970s, the country started its journey to become one of the richest nations in the world. We Swedes have some-times been a little envious of this, and perhaps even thought it was a shame we no longer have the union! Huge oil revenues also create major challenges, and many countries have not managed so well. But Norway has.