Employee Profile

Tommy Sveen

Head of Department - Department of Economics

Image of Tommy Sveen

Biography

Tommy Sveen is Professor of Economics at BI Norwegian Business School. He holds a PhD (Dr.Oecon) in Economics from the Norwegian School of Economics (NHH).

Research areas

Monetary Economics, Macroeconomics, Open Economy Macroeconomics

Please see Tommy Sveen's RePEc/IDEAS entry

Publications

Bergholt, Drago; Røisland, Øistein, Sveen, Tommy & Torvik, Ragnar (2023)

Monetary policy when export revenues drop

137 Doi: https://doi.org/10.1016/j.jimonfin.2023.102893 - Full text in research archive

We study how monetary policy should respond to shocks that permanently alter the steady state structure of the economy. In such a case monetary policy affects not only the short run misallocations due to nominal rigidities, but also relative prices which stimulate reallocation of capital. We consider a permanent and negative shock to export revenues that requires a larger traded sector and a smaller non-traded sector in the new steady state. This reallocation calls for a change in relative prices during the transition, but may also lead to a period of high unemployment. We show how an appropriate monetary policy could mitigate the welfare costs of the transition by allowing the exchange rate to depreciate, and thereby allowing inflation to increase in the short run. Traditional monetary policy regimes, such as inflation targeting or a fixed exchange rate, would imply high unemployment and inefficiently slow transition. Stabilizing nominal wage growth, in contrast, would be close to the welfare-optimal monetary policy.

Reiter, Michael; Sveen, Tommy & Weinke, Lutz (2023)

Idiosyncratic Shocks, Lumpy Investment and the Monetary Transmission Mechanism

23(2) , s. 1037- 1055. Doi: https://doi.org/10.1515/bejm-2022-0129

Standard (S, s) models of lumpy investment allow us to match many aspects of the micro data, but it is well known that the implied interest rate sen- sitivity of investment is unrealistically large. In fact, the micro-level lumpiness in investment puts empirical discipline on the modeling of investment decisions, and this makes it hard to explain the monetary policy transmission mechanism.

Røisland, Øistein; Sveen, Tommy & Torvik, Ragnar (2023)

Samspillet mellom penge- og finanspolitikken i en liten, åpen økonomi

137(6) , s. 41- 52. - Full text in research archive

Vi utvikler en teori for det optimale samspillet mellom penge- og finanspolitikken i konjunkturstyringen. Mens en i utgangspunktet kunne tro at penge- og finanspolitikken bør dra konjunkturene i samme retning, viser vi at dette ikke nødvendigvis er tilfelle. Dersom det ikke er store kostnader ved å bruke renten aktivt, skal penge- og finanspolitikken dra i hver sin retning ved inflasjonssjokk og valutakurssjokk. Grunnen er at pengepolitikken kan påvirke inflasjonen både gjennom etterspørselskanalen og gjennom valutakurskanalen, mens finanspolitikken bare kan benytte etterspørselskanalen. Pengepolitikken har derfor et komparativt fortrinn i å stabilisere inflasjonen, mens finanspolitikken har et komparativt fortrinn i å stabilisere produksjonen. Kun når det er tilstrekkelig store kostnader ved å endre renten, vil det være optimalt at penge- og finanspolitikken skal dra i samme retning ved inflasjonssjokk og valutakurssjokk. Kostnader ved bruk av finanspolitikk har ingen betydning for om penge- og finanspolitikk skal dra i samme retning eller ikke, men har implikasjoner for hvor sterk virkemiddelbruken bør være.

Furlanetto, Francesco; Sveen, Tommy & Weinke, Lutz (2019)

Technology and the two margins of labor adjustment: A New Keynesian perspective

20(1) , s. 1- 18. Doi: https://doi.org/10.1515/bejm-2018-0217

Canova et al. [Canova, F., J. D. López-Salido, and C. Michelacci. 2010. “The Effects of Technology Shocks on Hours and Output: A Robustness Analysis.” Journal of Applied Econometrics 25: 755–773; Canova, F., J. D. López-Salido, and C. Michelacci. 2012. “The Ins and Outs of Unemployment: An Analysis Conditional on Technology Shocks.” The Economic Journal 123: 515–539] estimate the dynamic response of labor market variables to technological shocks. They show that investment-specific shocks imply predominantly an adjustment along the intensive margin (i.e., hours per worker), whereas for neutral shocks the largest share of the adjustment takes place along the extensive margin (i.e., employment). In this paper we develop a New Keynesian model featuring capital accumulation, two margins of labor adjustment and a hiring cost. The model is used to analyze a novel economic mechanism to explain that evidence.

Reiter, Michael; Sveen, Tommy & Weinke, Lutz (2018)

Agency costs and the monetary transmission mechanism

20(1) , s. 1- 11. Doi: https://doi.org/10.1515/bejm-2018-0010

Sveen, Tommy & Weinke, Lutz (2017)

Optimal Monetary Policy with Nominal Rigidities and Lumpy Investment

13(4) , s. 35- 62. - Full text in research archive

New Keynesian theory generally abstracts from the lumpy nature of plant-level investment. Given the prominent role of investment spending for shaping optimal monetary policy, this simplification could be problematic. Our analysis suggests, however, that this is not the case in the context of a New Keynesian model featuring lumpy investment `a la Sveen and Weinke (2007).

Sveen, Tommy (2014)

Capital accumulation,sectoral heterogeneity and the Taylor principle

44, s. 20- 28. Doi: https://doi.org/10.1016/j.jedc.2014.04.007

Bache, Ida Wolden; Sveen, Tommy & Torstensen, Kjersti Næss (2013)

Revisiting the importance of non-tradable goods' prices in cyclical real exchange rate fluctuations

57, s. 98- 107. Doi: https://doi.org/10.1016/j.euroecorev.2012.10.007

Reiter, Michael; Sveen, Tommy & Weinke, Lutz (2013)

Lumpy investment and the monetary transmission mechanism

60(7) , s. 821- 834. Doi: https://doi.org/10.1016/j.jmoneco.2013.08.003

Sveen, Tommy & Weinke, Lutz (2013)

The Taylor principle in a medium-scale macroeconomic model

37(12) , s. 3034- 3043. Doi: https://doi.org/10.1016/j.jedc.2013.09.003

Haugland, Kjersti; Sveen, Tommy & Grytten, Ola Honningdal (2021)

Norges Bank Watch 2021: An independent Evaluation of Monetary Policy in Norway

[Report Research].

Fjære, Jeanette S. & Sveen, Tommy (2018)

Norges Bank Watch 2018: An independent Evaluation of Monetary Policy in Norway

[Report Research].

Each year the Centre for Monetary Economics (CME) at The Department of Economics, BI Norwegian Business School, appoints an independent group of experts to evaluate monetary policy in Norway. This year the committee consists of Jeanette Strøm Fjære, Macroeconomist at DnB Markets, and myself, Professor in Economics at BI Norwegian Business School. The committee is solely responsible for the report and the views therein. The report does not necessarily represent the views of the CME or of its members. The Ministry of Finance partly funds the Norges Bank Watch reports, which contain useful information and analyses for the Ministry’s evaluation of monetary policy presented each year in a White Paper to Parliament.

Bruce, Erik & Sveen, Tommy (2017)

Norges Bank Watch 2017 An Independent Evaluation of Monetary Policy in Norway

[Report Research].

Sveen, Tommy & Boye, Katrine Godding (2013)

Norges Bank Watch 2013 An Independent Evaluetaion of Montetary Policy in Norway

[Report Research].

Bergholt, Drago & Sveen, Tommy (2013)

Sectoral Interdependence and Business Cycle Synchronization in Small Open Economies

[Conference Lecture]. Event

Bergholt, Drago & Sveen, Tommy (2013)

Sectoral Interdependence and Business Cycle Synchronization in Small Open Economies

[Conference Lecture]. Event

Bergholt, Drago & Sveen, Tommy (2013)

Sectoral Interdependence and Business Cycle Synchronization in Small Open Economies

[Conference Lecture]. Event

Academic Degrees
Year Academic Department Degree
2001 Norwegian School of Economics (NHH) Ph.D Dr. Oecon.
1995 Norwegian School of Economics (NHH) Master Cand. Oecon
1988 BI Norwegian Business School Master of Science in Business
Work Experience
Year Employer Job Title
2021 - Present Norwegian School of Economics (NHH) Adjunct professor
2019 - Present BI Norwegian Business School Head of Department of Economics
2015 - Present Centre for Monetary Economics Director
2011 - Present BI Norwegian Business School Professor of Economics
2020 - 2021 BI Norwegian Business School Head of Department of Data Science and Analytics
2011 - 2015 Norges Bank, Research Department Visiting scholar
2010 - 2011 Norges Bank, Research Department Assistant Director
2009 - 2010 Norges Bank, Research Department Senior Advisor
2008 - 2009 Norges Bank, Monetary Policy Department Senior Advisor
2007 - 2008 Norges Bank, Economics Department Assistant Director
2002 - 2007 Norges Bank, Research Department Researcher
2001 - 2002 Universitat Pompeu Fabra Post doctoral scholar