Norway’s use of revenue from its substantial oil fund has increased dramatically, prompting concern from former central bank governor Svein Gjedrem. Gjedrem argues the current fiscal rule, designed to allow increased spending as the fund grows, is leading to an overly expansionary fiscal policy. He believes this approach risks fueling inflation and creating economic imbalances. The “handlingsregelen” (fiscal rule) links government spending to the expected long-term return on the oil fund, allowing withdrawals to increase as the fund’s value rises. Critics suggest this system doesn’t adequately account for current economic conditions and could lead to unsustainable spending levels. Gjedrem advocates for a more conservative approach to oil fund withdrawals to ensure long-term economic stability and responsible fiscal management. The debate highlights ongoing tensions regarding the optimal use of Norway’s vast sovereign wealth fund.