Gisle J. Natvik is a professor of economics at the Norwegian Business School (BI). His main research interests are within macro economics, monetary economics and political economy.
Natvik's work has been published in European Economic Review, International Economic Review, Journal of the European Economic Association, Journal of Money, Credit and Banking, Journal of Public Economics, and other journals.
Asset valuations across many asset classes have increased substantially over the last several decades. While these rising valuations had important effects on the distribution of wealth, little is known regarding their redistributive effects in terms of welfare. To make progress on this question, we develop a sufficient statistic for the money-metric welfare gain of deviations in asset valuations. This welfare gain depends on the present value of an individual’s net asset sales rather than asset holdings: higher asset valuations benefit prospective sellers and harm prospective buyers. We estimate this quantity using panel microdata covering the universe of financial transactions in Norway from 1994 to 2019. We further demonstrate how to adapt our baseline statistic to account for important considerations, such as incomplete markets and collateral constraints. We find that the rise in asset valuations had large redistributive effects: it redistributed from the young to the old and from the poor to the wealthy.
Mehlum, Halvor; Natvik, Gisle James & Torvik, Ragnar (2024)
The impossible trinity: Competitive markets, free entry, and efficiency
We present a model in which workers make occupational choices and vote over a tax rate which determines the level of government spending. Workers in occupations whose services are in high (low) demand by the government favor high (low) taxes. We show that the socially efficient size of the public sector cannot be supported in a political economic equilibrium. The reason is that equilibrium tax rates always reward excessive entry into the politically most powerful sector, and thus the equilibrium size of government is always either too big or too small. We show that this is an example of a more general political economy result that extends well beyond the baseline model and holds quite generally: the combination of (i) competitive markets and (ii) free entry is inconsistent with (iii) allocative efficiency.
Fagereng, Andreas; Holm, Martin Blomhoff & Natvik, Gisle James (2021)
We use sizable lottery prizes in Norwegian administrative panel data to explore how transitory income shocks are spent and saved over time, and how households’ marginal propensities to consume (MPCs) vary with household characteristics and shock size. We find that spending peaks in the year of winning and gradually reverts to normal within five years. Controlling for all items on households’ balance sheets and characteristics such as education and income, it is the amount won, age, and liquid assets that vary systematically with MPCs. Low-liquidity winners of the smallest prizes (around USD 1,500) are estimated to spend all within the year of winning. The corresponding estimate for high-liquidity winners of large prizes (USD 8,300-150,000) is slightly below one half. While conventional models will struggle to account for such high MPC levels, we show that a two-asset life-cycle model with a realistic earnings profile and a luxury bequest motive can account for both the time profile of consumption responses and their systematic co-variation with observables.
Gulbrandsen, Magnus Andreas Haare & Natvik, Gisle James (2020)
We address the interplay between household debt accumulation and monetary policy. Monetary policy likely affects household debt-to-income ratios via disposable income and inflation, not just by changing the financial incentive to save. We provide micro-level snapshots from Norway on how households’ income flows and debt accumulation co-move with interest rates and inflation. Real interest rate hikes are associated with increased real debt due to strong negative association between inflation and real debt. We therefore caution against pursuing contractionary policies to curb household debt. By lowering inflation, such policies might backfire and increase household debt burdens.
Natvik, Gisle James & Grisse, Christian (2020)
Sovereign debt crises and cross-country assistance
We provide a parsimonious framework to study the interplay between cross-country assistance and expectations-driven sovereign debt crises. Our framework extends the traditional single-country model of how multiple perfect-foresight equilibria are possible when a sovereign attempts to service public debt. The extension is that a self-interested ‘safe’ country may choose to assist a ‘risky’ country which is prone to default. Investors internalize the potential for assistance when lending to fragile countries. If the safe country cannot commit to fixed cross-country transfers or rule them out completely, assistance improves equilibrium outcomes only if the risky country is fundamentally insolvent in the sense that it cannot repay existing debt at the risk-free interest rate. If a default requires pessimistic expectations, an incentive-compatible (IC) assistance policy has adverse side effects.
Natvik, Gisle James; Rime, Dagfinn & Syrstad, Olav (2020)
Does publication of interest rate paths provide guidance?
Does the central bank practice of publishing interest rate projections (IRPs) improve how market participants map new information into future interest rates? Using high-frequency data on forward rate agreements (FRAs) we compute market forecast errors; differences between expected future interest rates and ex-post realizations. We assess their change in narrow windows around monetary policy announcements and macroeconomic releases in Norway and Sweden. Overall, communication of future policy plans does not improve markets’ response to information, irrespective of whether or not IRPs are in place. A decomposition of market reactions into responses to the current monetary policy action (“target”) and responses to signals about the future (“path”), reveals that only policy actions lead to improvements in market forecasts.
Caporin, Massimiliano; Natvik, Gisle James, Ravazzolo, Francesco & Magistris, Paolo Santucci de (2019)
The bank-sovereign nexus: Evidence from a non-bailout episode
We explore the interplay between sovereign and bank credit risk in a setting where Danish authorities first let two Danish banks default and then left the country’s largest bank, Danske Bank, to recapitalize privately. We find that the correlation between bank and sovereign credit default swap (CDS) rates changed with these events. Following the non-bailout events, the sensitivity to external shocks, proxied by CDS rates on the European banking sector, declined both for Danske Bank and for Danish sovereign debt. After Danske Bank’s recapitalization, its exposure to the European banking sector reappeared while that did not happen for Danish sovereign debt. The decoupling between CDS rates on sovereign and private bank debt indicates that the vicious feedback loop between bank and sovereign risk weakened after the non-bailout policies were introduced.
Holden, Steinar; Natvik, Gisle James & Vigier, Adrien Henri (2018)
We develop an equilibrium theory of credit rating in the presence of rollover risk. By influencing rational creditors, ratings affect sovereigns' probability of default, which in turn affects ratings. Our analysis reveals a pro‐cyclical impact of credit rating: In equilibrium the presence of a rating agency increases default risk when it is high and decreases default risk when it is low.
Gelain, Paolo; Lansing, Kevin & Natvik, Gisle James (2018)
How should a central bank act to stabilize the ratio of debt over gross domestic product (GDP)? We show how the persistent nature of household debt shapes the answer to this question. In environments where households repay mortgages gradually, surprise interest hikes only weakly influence household debt, and tend to increase debt-to-GDP in the short run while reducing it in the medium run. Interest rate rules with a positive weight on debt-to-GDP cause indeterminacy. Compared to inflation targeting, debt-to-GDP stabilization calls for a more expansionary policy when debt-to-GDP is high, so as to deflate the debt burden through inflation and output growth.
Gelain, Paolo; Lansing, Kevin & Natvik, Gisle James (2018)
Explaining the Boom-Bust Cycle in the U.S. Housing Market: A Reverse-Engineering Approach
We use a quantitative asset pricing model to “reverse‐engineer” the sequences of shocks to housing demand and lending standards needed to replicate the boom–bust patterns in U.S. housing value and mortgage debt from 1993 to 2015. Conditional on the observed paths for U.S. real consumption growth, the real mortgage interest rate, and the supply of residential fixed assets, a specification with random walk expectations outperforms one with rational expectations in plausibly matching the patterns in the data. Counterfactual simulations show that shocks to housing demand, housing supply, and lending standards were important, but movements in the mortgage interest rate were not.
Aastveit, Knut Are; Natvik, Gisle James & Sola, Sergio (2017)
Economic uncertainty and the influence of monetary policy
This paper explores if economic uncertainty alters the macroeconomic influence of monetary policy. We use several measures of U.S. economic uncertainty, and estimate their interaction with monetary policy shocks as identified through structural vector autoregressions. We find that U.S. monetary policy shocks affect economic activity less when uncertainty is high, in line with “real-option” effects from theory. Holding uncertainty constant, the effect on investment is approximately halved when uncertainty is in its top instead of its bottom decile.
Matsen, Egil; Natvik, Gisle James & Torvik, Ragnar (2016)
We aim to explain petro populism|the excessive use of oil revenues to buy political support. To reap the full gains of natural resource income, politicians need to remain in o ce over time. Hence, even a rent-seeking incumbent who prioritizes his own welfare above that of citizens, will want to provide voters with goods and services if it promotes his probability of remaining in o ce. While this incentive bene ts citizens under the rule of rent-seekers, it adversely motivates benevolent policymakers to short-term overprovision of goods and services. In equilibrium, politicians of all types indulge in excessive resource extraction, while voters reward policies they realize cannot be sustained over time. Moreover, overextraction might even be reinforced as voters become better informed.
Natvik, Gisle James & Mirkov, Nikola (2016)
Announcements of interest rate forecasts: Do policymakers stick to them?
If central banks value the ex post accuracy of their published forecasts, previously announced interest rate paths might influence the current policy rate. We explore if “forecast adherence” has affected monetary policy in New Zealand and Norway, where central banks have published their interest rate forecasts the longest. We derive and estimate policy rules with separate weights on past interest rate forecasts and find that they have explanatory power for current policy decisions, over and above their correlation with other conventional interest rate rule arguments.
Natvik, Gisle James (2013)
The Political Economy of Fiscal Deficits and Government Production
Holm, Martin B.; Natvik, Gisle James, Kinnerud, Karin & Storesletten, Kjetil (2024)
På høy tid å justere avdragskravet
[Kronikk]
Wold, Ella Getz & Natvik, Gisle James (2024)
Ulikhet går i arv via boligmarkedet
[Kronikk]
Natvik, Gisle James (2024)
Knapphet i økonomiundervisningen
[Kronikk]
Natvik, Gisle James (2024)
Krigsøkonomien vil gjøre samfunnet fattigere
[Kronikk]
Holm, Martin B. & Natvik, Gisle James (2023)
Hvorfor ikke lavere skatter?
[Kronikk]
Natvik, Gisle James (2022)
Et problem med krisestøtte til næringslivet
[Kronikk]
Natvik, Gisle James (2022)
Slåss du mot grunnleggende fornuftig beskatning, ber du om ustabilitet
[Kronikk]
Natvik, Gisle James (2022)
Renteøkning nå, når ressursene blir knappe?
[Kronikk]
Natvik, Gisle James (2022)
Hvordan havnet vi her?
[Kronikk]
Natvik, Gisle James (2022)
Karantenegevinstene synes ikke å ha blitt vurdert opp mot kostnadene de påfører barna
[Kronikk]
Natvik, Gisle James (2022)
Utilsiktet effekt av Boliglånsforskriften?
[Kronikk]
Natvik, Gisle James (2022)
Farvel til Norges verste kontrakt?
[Kronikk]
Natvik, Gisle James (2022)
Pengepolitikken er ikke særlig stram nå
[Kronikk]
Natvik, Gisle James (2021)
7 faste kronikker i DN 2021
[Kronikk]
Natvik, Gisle James (2020)
Krisetiltakene må endres slik at de fremmer verdiskaping
[Kronikk]
Natvik, Gisle James (2020)
Bra for bedriften betyr ikke bra for samfunnet
[Kronikk]
Natvik, Gisle James (2020)
Reservasjonsrett mot forbrukslån
[Kronikk]
Natvik, Gisle James (2020)
Tåkelegger oljepengebruken
[Kronikk]
Natvik, Gisle James (2020)
Inflasjon og gjeld
[Kronikk]
Natvik, Gisle James (2020)
Veien tilbake til tre prosent
[Kronikk]
Natvik, Gisle James (2020)
Frempek som virkemiddel i økonomisk politikk
[Kronikk]
Natvik, Gisle James & Holden, Steinar (2019)
Forbrukslån må bli mindre lønnsomt
[Kronikk]
Natvik, Gisle James (2019)
Spisskompetanse sist og ulne prioriteringer nok en gang
[Kronikk]
Natvik, Gisle James (2018)
Verden venter, SSB
[Kronikk]
Fiva, Jon H. & Natvik, Gisle James (2015)
Skatten de elsker å hate https://www.bi.no/bizreview/artikler/skatten-de-elsker-a-hate/
[Kronikk]
Natvik, Gisle James (2025)
Deltagelse i paneldiskusjon "Svindlere ruinerer bankkunder – hvem skal ta regningen?" under Arendalsuka, arrangert at HELP forsikring, hos Sparebanken Norge.
[Conference Lecture]. Event
HELP forsikring erfarer at omfanget av investeringsssvindel i Norge øker raskt. Gjeldende praksis er at svindelofferet må dekke hele tapet. Et viktig spørsmål er om det ville vært mer effektivt om bankene tok en del av tapet også. Mer generelt, hva skal til for at banker, kunder og myndigheter mer effektivt bekjemper investeringssvindel?
Natvik, Gisle James (2025)
Deltagelse i panelsamtalen «Helhetlig digital identitetsforvaltning: konkrete tiltak» under konferansen «Identitet» arrangert av Norsk senter for informasjonssikring.
[Conference Lecture]. Event
Panel om ulike løsninger for å oppnå digital inkludering og lav svindelrisiko når man ruller ut elektroniske identiteter og elektroniske lommebøker.
Natvik, Gisle James (2024)
Norsk syke - fest eller kolera? + Deltagelse i debatt om boligmarked
[Lecture]. Event
Kinnerud, Karin; Ellingsrud, Sigmund & Natvik, Gisle James (2024)
The inflation tilt effect
[Conference Lecture]. Event
Natvik, Gisle James; Kinnerud, Karin & Ellingsrud, Sigmund (2024)
The inflation tilt effect
[Lecture]. Event
Natvik, Gisle James; Wold, Ella Getz, Aastveit, Knut Are, Juelsrud, Ragnar Enger & Brandsaas, Eirik (2024)
The Housing Channel of Intergenerational Wealth Persistence
[Lecture]. Event
Natvik, Gisle James; Holm, Martin Blomhoff, Fagereng, Andreas, Gulbrandsen, Magnus, Kinnerud, Karin & Ellingsrud, Sigmund (2024)
Monetary Policy and Household Indebtedness – How Important are Fisher and Tilt Effects?
[Lecture]. Event
Holm, Martin B.; Natvik, Gisle James, Fagereng, Andreas & Moll, Benjamin (2023)
Saving Behavior across the Wealth Distribution: The Importance of Capital Gains
[Conference Lecture]. Event
Ellingsrud, Sigmund; Kinnerud, Karin & Natvik, Gisle James (2023)
eID i offentlig forvaltning - sårbarhet, risiko og løsninger
[Lecture]. Event
Program
12.30: Oppmøte og servering av kaffe, te og frukt.
12.45: Velkommen ved Digital velferdsstat og SODI
med professor Ingunn Ikdahl og professor Marte Kjørven.
12.55: Introduksjon: Om eID i offentlig forvaltning.
med Trude Myklebust, førsteamanuensis, Institutt for privatrett, og Edvin Tengs Leirvåg, Digitaliseringsdirektoratet.
13.25: «Aktørstafett»: korte oppspill om sårbarhet og risiko.
Nav v/ Marte Vidnes Jensen
Skatteetaten v/ Trude Åsrum.
Brønnøysundregistrene v/ Marie Lauten.
Spørsmål fra salen.
14.05: Pause
14.20: «Aktørstafett»: korte oppspill om sårbarhet og risiko.
LDO v/ Victoria Hovig Frigland.
Norsk Forbund for Utviklingshemmede v/ Ingvild Østerby.
Om eID i fengsel, vitenskapelig assistent Mira Stokke.
Spørsmål fra salen
15.00: Akademisk høyttenking: Hvordan kan vi tenke om eID i offentlig forvaltning fremover?
Inger Johanne Sand, professor emerita, Institutt for offentlig rett.
Gisle Natvik, professor, Institutt for samfunnsøkonomi, BI.
Kristin Bergtora Sandvik, professor, Institutt for kriminologi og rettssosiologi.
Luca Tosoni, Datatilsynet, tidligere stipendiat på Institutt for privatrett.
15.55: Avslutning v/ Trude Myklebust og Ingunn Ikdahl.
Fagereng, Andreas; Gulbrandsen, Magnus Andreas Haare, Holm, Martin B. & Natvik, Gisle James (2022)
How Does Monetary Policy Affect Household Indebtedness?
[Conference Lecture]. Event
Harmenberg, Karl; Gulbrandsen, Magnus Andreas Haare, Fagereng, Andreas & Natvik, Gisle James (2022)
Macro shocks in a micro laboratory: evidence on spousal income insurance, spending, and spillovers
[Conference Lecture]. Event
Fagereng, Andreas; Gomez, Matthieu, Gouin-Bonenfant, Emilien, Holm, Martin B., Moll, Benjamin & Natvik, Gisle James (2022)
Asset-Price Redistribution
[Conference Lecture]. Event
Fagereng, Andreas; Gomez, Matthieu, Gouin-Bonenfant, Emilien, Holm, Martin B., Moll, Benjamin & Natvik, Gisle James (2022)
Asset-Price Redistribution
[Conference Lecture]. Event
Fagereng, Andreas; Gomez, Matthieu, Gouin-Bonenfant, Emilien, Holm, Martin B., Moll, Benjamin & Natvik, Gisle James (2022)
Asset-Price Redistribution
[Conference Lecture]. Event
Fagereng, Andreas; Gomez, Matthieu, Gouin-Bonenfant, Emilien, Holm, Martin B., Moll, Benjamin & Natvik, Gisle James (2022)
Asset-Price Redistribution
[Conference Lecture]. Event
Kinnerud, Karin; Natvik, Gisle James & Ellingsrud, Sigmund (2022)
Do indebted households benefit from inflation?
[Conference Lecture]. Event
Mehlum, Halvor; Natvik, Gisle James & Torvik, Ragnar (2021)
The Inefficient Combination: Competitive Markets, Free Entry, and Democracy
[Report Research].
We show that under fairly general conditions, the combination of (i) competitive markets, (ii) free entry, and (iii) democracy is inconsistent with allocative efficiency. This fundamental impossibility result, which has not been derived before, holds whenever not only prices, but also policy, responds to factor allocations. We develop a theory where agents enter an occupation (more generally, enter an economic activity) and thereafter make a policy decision. Thus, each voter's self interest becomes endogenous to the entry decision. In our baseline model, the policy instrument that citizens decide upon is simply taxation. Workers in occupations whose services are in high demand by the government have an incentive to vote for high taxes. Voters in occupations whose services are in low demand by the government have an incentive to vote for low taxes. We show that the socially efficient size of the public sector cannot be sustained in equilibrium, despite free entry into occupations. We generalize our theory, and show how our impossibility result extends well beyond the baseline model. We also discuss how departing from competitive markets may affect equilibrium outcomes. Our analysis implies that when assessing causes and consequences of factor allocations, it is key to acknowledge how allocations affect not only prices, but also policies.
Natvik, Gisle James; Fagereng, Andreas, Moll, Benjamin & Holm, Martin Blomhoff (2021)
Saving Behavior across the Wealth Distribution: The Importance of Capital Gains
[Lecture]. Event
Fagereng, Andreas; Holm, Martin Blomhoff, Gulbrandsen, Magnus & Natvik, Gisle James (2021)
How Does Monetary Policy Affect Household Indebtedness?
[Professional Article]. 2021(5) , s. 1- 24.
Natvik, Gisle James & Gulbrandsen, Magnus Andreas Haare (2020)
Monetary Policy and Household Debt
[Conference Lecture]. Event
Natvik, Gisle James; Fagereng, Andreas, Holm, Martin Blomhoff & Moll, Benjamin (2020)
Saving Behavior Across the Wealth Distribution
[Lecture]. Event
Fagereng, Andreas; Natvik, Gisle James, Holm, Martin Blomhoff & Moll, Benjamin (2019)
Saving Behavior Across the Wealth Distribution: The Importance of Capital Gains
[Conference Lecture]. Event
Fagereng, Andreas; Holm, Martin Blomhoff, Moll, Benjamin & Natvik, Gisle James (2019)
Saving Behavior Across the Wealth Distribution: The Importance of Capital Gains
[Conference Lecture]. Event
Fagereng, Andreas; Natvik, Gisle James, Holm, Martin Blomhoff & Moll, Benjamin (2019)
Saving Behavior Across the Wealth Distribution
[Conference Lecture]. Event
Moll, Benjamin; Fagereng, Andreas, Holm, Martin Blomhoff & Natvik, Gisle James (2019)
Saving Behaviour Across the Wealth Distribution
[Lecture]. Event
Natvik, Gisle James & Gulbrandsen, Magnus Andreas Haare (2019)
Monetary policy and household debt
[Conference Lecture]. Event
Fagereng, Andreas; Holm, Martin Blomhoff, Moll, Benjamin & Natvik, Gisle James (2019)
Saving Behavior Across the Wealth Distribution: The Importance of Capital Gains
[Report Research].
Fagereng, Andreas; Holm, Martin Blomhoff, Moll, Benjamin & Natvik, Gisle James (2019)
Saving Behavior Across the Wealth Distribution
[Conference Lecture]. Event
Fagereng, Andreas; Holm, Martin Blomhoff & Natvik, Gisle James (2018)
MPC Heterogeneity and Household Balance Sheets
[Conference Lecture]. Event
Holm, Martin Blomhoff; Fagereng, Andreas & Natvik, Gisle James (2017)
MPC Heterogeneity and Household Balance Sheets
[Conference Lecture]. Event
Natvik, Gisle James; Holm, Martin Blomhoff & Fagereng, Andreas (2017)
MPC heterogeneity and household balance sheets
[Conference Lecture]. Event
Natvik, Gisle James; Holm, Martin Blomhoff & Fagereng, Andreas (2017)
MPC heterogeneity and household balance sheets
[Conference Lecture]. Event
Holm, Martin Blomhoff; Natvik, Gisle James & Fagereng, Andreas (2017)
MPC heterogeneity and household balance sheets
[Conference Lecture]. Event
Natvik, Gisle James; Gelain, Paolo & Lansing, Kevin (2017)
Leaning against the credit cycle
[Conference Lecture]. Event
Holm, Martin Blomhoff; Fagereng, Andreas & Natvik, Gisle James (2017)
MPC Heterogeneity and Household Balance Sheets
[Conference Lecture]. Event
Holm, Martin Blomhoff; Fagereng, Andreas & Natvik, Gisle James (2017)
MPC Heterogeneity and Household Balance Sheets
[Conference Lecture]. Event
Holm, Martin Blomhoff; Natvik, Gisle James & Fagereng, Andreas (2016)
MPC Heterogeneity and Household Balance Sheets
[Conference Lecture]. Event
Holm, Martin Blomhoff; Fagereng, Andreas & Natvik, Gisle James (2016)
MPC Heterogeneity and Household Balance Sheets
[Conference Lecture]. Event
Fiva, Jon H.; Natvik, Gisle James & Andersen, Jørgen Juel (2011)
Voting when the stakes are high
[Conference Lecture]. Event
Andersen, Jørgen Juel; Fiva, Jon H. & Natvik, Gisle James (2010)
Voting when the Stakes are High
[Report Research].
Rational choice theories of electoral participation stress that an individual's decision to vote depends on her expected net benefit from doing so. If this instrumental motive is relevant, then turnout should be higher in elections where more is at stake. We test this prediction, by studying how turnout is affected by exogenous variation in governments' financial flexibility to provide pork for their voters. By utilizing simultaneous elections for different offices, we identify a positive effect of election stakes on turnout.
