Description

Denmark, Finland, Norway, and Sweden form a tightly integrated region which has strong ties
with the euro area as well as some exposure to Russia. Using the IMF’s Global Integrated
Monetary and Fiscal model (GIMF), we examine spillovers the region could face, focusing on
possible scenarios from the rest of the euro area and Russia, and the fall in global oil prices. We
show that the spillovers from these scenarios differ in magnitude and impact, regardless of the
high degree of integration among the four Nordic economies. These differences are driven by the
fact that Denmark and Finland have no independent monetary policy, and Denmark and Norway
are net energy exporters while Finland and Sweden are energy importers. We infer lessons for
policy from the outcomes.

More publications in this series: Working Papers

More publications by: Borislava Mircheva ; Dirk Muir