Abstract
This article presents HOVMOD, a CGE model for Norway modeled as a small, open economy. HOVMOD differs from most other models in several respects. First, it is very closely related to comparative advantage theory. In particular, the Armington assumption is not applied; Norway is a price-taker on all world markets. Second, the world market prices come from a world trade model of similar structure. Third, HOVMOD takes factor growth, technological development, and so on into account and focuses on relatively long-run adjustments. With a 20-year horizon the study tries to identify the most important determinants of the structure of industry, and reveals major uncertainties and critical assumptions through comparative static exercises.
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