Norway

Derek Monacelli

Overall Score: 71.8 World Rank 27

Norway Quick Facts/United States


  • Population: 5.1 million
  • GDP:$280.0 billion
  • GDP Growth: 0.8%
  • GDP per capita: $54,947
  • Unemployment: 3.5%
  • Inflation: 2.1%
  • Foreign Direct Investment: 9.3 billion
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Legal System

Norway's score has increased by 0.9 points since last year by making improvements in their labor freedoms, monetary freedoms, and the management for public spending. These improvements have caused Norway's economic freedom score to increase by 1.1 points over the past 5 years. The only decline was in government spending as the government's response to low growth was additional spending.
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Competitive Markets

Norway's growth has been strong over the past ten years, but depleting oil reserves implies that growth will have to rely mainly on the mainland economy. The government wants to introduce reforms to help stimulate economic growth. But in doing this it has got in the way of other objectives that ended up resulting in weak competition. Not only weak competition in a number of sectors, but that results in high prices, and weak innovative activity and inefficient resource distribution.
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Limits on Government Regulation

Norway's government regulation is on individual tax rates that rate 47.8 percent. Top corporations are at a 27 percent tax rate. As this limits the amount of income tax Norway will get,the domestic economy equals the burden of 42.2 percent. Overall public debt is 30%.v
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An Efficient Capital Market

Norway's efficient and transparent supports private sector. It incorporates business costs and levels average income. Non-salary cost are are but severance payments are at a minimum. Currently, stability of the monetary value has been maintained through government every projects.
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Monetary Stability

The monitory policy depends on he interest rat set and the direction of inflation towards the target while at the same time avoiding overheating in the real economy.

Central banks influence over-night market rates directly via the policy rate. However, outside groups such as economic agents' consumption and investment decisions depend more on their interest rate expectations. Therefore, monetary policy works primarily by influencing expectations regarding future interest rates. An example grab below shows the bond yields over time from 1950 to 1975.

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Low Tax Rates

Norway's current income tax system has two standard deductions: basic allowance and personal allowance. The basic allowance is set as a proportion of the income with upper and lower limits. The personal allowance is a standard deduction from ordinary income, meaning that it is given in all income. Single parents and married couples where one person has a low income may be taxed and thus given double personal allowance.
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Free Trade

With a population of 4.5 million people, Norway is dependent on trade to maintain a high standard of living for its citizens. As a small country, free trade is crucial for the Norwegian economy. One of the main priorities of Norwegian trade policy is to increase market access for manufactured goods, fish, and services.
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Norway economy How it manages its massive savings
This video is about how Norway manages its massive savings. Norways oil and gas discoveries helped them get lots of money that they decided to save for future generations. Norway has the world's biggest national savings pot, built from the profits of resources (oil and gas primarily).

Whats interesting about Norway's economy.

Norwegian per capita income ranks among the world's highest.