The projects show a total loss of NOK 20 billion. There seems to be few road projects that are economically profitable. A rare example is the Finnfast tunnel project that connects the mainland to the beautiful island group in Ryfylke. The Bjørvika tunnel project is not profitable according to these criteria. Since the existing traffic interchange “Bispelokket” is so efficient, drivers will not save time when they take the tunnel between the east and west side of Oslo in the future. The economic return, as calculated here, cannot be the only criterion for selecting projects. The Bjørvika tunnel will make Oslo a better city in which to live and work for one million people and create values that are not easy to quantify. The same also applies to other government investments that provide benefits and satisfaction beyond an easily measured rate of return. On the other hand, when the projects cannot be expected to increase the future revenue base in society, it is important the investments are financed within a long-term and sustainable framework or financed by user fees. Infrastructure or research reports for that matter can provide benefits and satisfaction over time, but they are not liquid and do not generate cash returns that can be use for spending. If the investments are made at the expense of the savings plan for the sovereign wealth fund, future generations will have to bear the cost. Conclusion Allow me to conclude. This is my twelfth address entitled “Economic Perspectives”.
Moreover, decisions based on an arbitrary value of money cannot be sound, which is why stable and low inflation is a precondition for solid growth in the economy. The profitability of an investment project can only be calculated correctly when inflation is in line with expectations. Accounts tend to be misleading and equity prices uncertain if the purchasing power of money is not stable. The tax system, with its rates and thresholds in krone terms, impairs the distribution of resources to a greater extent when inflation is high and variable. The value of money and inflation have now been stable for almost 20 years. In earlier times, the value of money was more variable, and periods of high inflation tended to be followed by a fall in prices. The value of money fell sharply and permanently around the time of the two World Wars and earlier wars. In the 1970s and 1980s, the value of money also fell rapidly, but as a result of economic policy. The interest rate was kept at a low level and public spending was high in an attempt to achieve very low unemployment. 12  BIS Review 15/2010  Not only in Norway, but worldwide, there was a crisis in the monetary system in the 1970s. After the Second World War, the US dollar was pegged to gold while other countries held a fixed but adjustable exchange rate against the dollar.