Oil Warning Sounded by Norway Central Banker Ulltveit-Moe

Norwegian economist Karen Helene Ulltveit-Moe got where she is by speaking out. Now that she’s joined the board of the country’s central bank, she’ll have to learn to zip her lip in public.

She quit a committee charged with making industrial-policy recommendations in 2005 to protest how it was reaching its conclusions. Her research challenging a tax break for the shipping industry landed her in front of a parliamentary group to explain her findings. She’s been among the strongest voices saying Norway must prepare for the time when oil revenue no longer fuels the economy.

Ulltveit-Moe, 46, is at one of Norway’s most consensual institutions. She was named to the bank board in December and participated in the decision to keep the key interest rate unchanged at 1.5 percent, announced today. Her career also includes being the first female professor in the University of Oslo economics department and serving on a dozen corporate management and advisory boards.

As a Norges Bank executive-board member, Ulltveit-Moe will have to get used to raising what she calls her “independent voice” only within its walls. Minutes of meetings on monetary policy and interest rates aren’t made public for 12 years because the body makes decisions by consensus. It also oversees Norway’s $850-billion sovereign oil fund, the world’s largest, and thus will grapple with solutions to declining oil revenue.

Questioning Forecasts

“She is certainly a person who speaks her mind, even if that means being very critical about what other people are saying,” said Karolina Ekholm, a deputy governor at Sweden’s central bank. Ulltveit-Moe “needs to be able to question economic forecasts and policy proposals, even if everyone else agrees with them.” The two women have collaborated on research on trade, multinational companies and foreign direct investment.

Ulltveit-Moe says she doesn’t regret stepping out of the public arena. Being on the board “really gives you a more direct influence than just promoting your views through the press,” she said in her 10th-floor office with a view of the Oslo Fjord. “It’s very important for the bank to have a coherent voice and not to confuse the markets.”

Like all members save Governor Oeystein Olsen and incoming Deputy Governor Jon Nicolaisen, Ulltveit-Moe’s position is part-time. She is continuing to teach.

Ulltveit-Moe comes from a family of lawyers tracing back to her great-grandfather. Growing up in Oslo, she says choosing economics was her act of teenage rebellion.

Krugman Fan

“Lawyers are ranked differently in my family than economists -- at the top you have lawyers and some place further down you have economists,” she said with a laugh. Her parents were both lawyers, as is one brother and several cousins.

After high school in the Norwegian capital, Ulltveit-Moe moved to Mannheim in Germany, studying for a Master of Science degree in business studies. She then did postgraduate work and earned her doctorate from the Norwegian School of Economics in Bergen.

She decided to focus on international economics after coming across Nobel Laureate Paul Krugman’s book “Geography and Trade.”

“He has a way of making things that are rather complex, simple,” she said. “It made me realize relationships that I hadn’t thought about before.”

While Ulltveit-Moe didn’t become a lawyer, the family value that stuck with her was the importance of education. At home, homework and school dominated the conversation. Her parents wouldn’t have paid any heed if she had earned a sports medal, she said.

‘Boys’ World’

They “cared lots about my grades,” she said. “At an early point I got an understanding that learning is fascinating.”

That passion evolved into a love for her work, which is her hobby, her pastime and her job, she said. That made it easier to penetrate what at the time was a male-dominated field.

The University of Oslo’s economics department “was very much a boys’ world” when Ulltveit-Moe was made professor in 2005, and “economics is a male-dominant subject,” she said. “I don’t regard it as a problem to have male colleagues. But the older I get, the more I think that it’s important to have working places where you have a balance of the sexes because this is the dominant part of your life: where you work.”

Ulltveit-Moe said she seeks to be a role model for younger women, providing career advice and pushing to reshape the workplace to make it easier to balance profession and family.

Corporate Boards

Just before she joined the Oslo faculty, she withdrew from a government-appointed commission charged with making recommendations on how policymakers should support industries. The expected conclusions, she said, “were absolutely not based on sound economic principles.”

She has served on the boards and corporate assemblies of 12 Norwegian companies, including Storebrand ASA, the nations’ second-largest insurer, and aluminum producer Norsk Hydro ASA.

While on the board of state-controlled Gassnova SF, which advises on carbon-capture projects, Ulltveit-Moe in 2011 objected to continuing with a full-scale plant along the lines proposed by Statoil ASA. The project, dubbed Norway’s “moon landing” by then-Prime Minister Jens Stoltenberg, was scrapped last year after cost overruns and delays. Ulltveit-Moe wasn’t re-elected to the board.

She took “a principled view” on how money should be spent “relative to the task that was on hand,” said Johan Nic Vold, managing director of nonprofit Oslo Energy Forum and chairman of Gassnova at the time.

“She is very good at translating her theory of economics into practical views about how society should function,” Vold said of Ulltveit-Moe’s engagement in public debate.

Oil Diversification

Ulltveit-Moe argues that the oil fund, holder of 1.3 percent of global stocks, will fail to benefit future generations unless other sources of income are found. Offshore crude, discovered in 1969, has made Norway the second-richest nation in Europe per capita after Luxembourg. The country will hit a wall in 2035 when oil runs out, she said in a September opinion piece in business daily Dagens Naeringsliv.

“I look at how much the oil has meant to the economy and how different Norway is today from what it was when I grew up,” she said in the interview. “We’re very spoiled compared to what we were a couple of decades ago. It’s going to be hard to keep that up.”

She isn’t alone in arguing for a more effective use of oil funds. Hilde Bjoernland, professor at Norwegian Business School in Oslo, has led research on wage growth in the industry and says it’s putting more and more pressure on pay in non-petroleum sectors.

Tax Debate

Ulltveit-Moe said she bases her arguments on economic theory and analysis rather than opinions or feelings. In 1999, she investigated Norway’s maritime industry and found the companies didn’t qualify as being interconnected. The industry, which had received a tax break on that basis, was upset at the empirical work she did with her colleague Frode Steen, now a professor of economics at the Norwegian School of Economics.

Ulltveit-Moe was invited to appear before the Labor Party’s Industry Committee in parliament to explain her views after lawmakers balked at her findings.

“She handled that brilliantly,” said Victor Norman, a former labor minister and one of the supervisors for Ulltveit-Moe’s thesis, entitled “On the Location of Economic and Academic Activity.” “Karen Helene has a spine, which is a rare thing. In the choice between what’s opportune and what’s economically correct, there is never any doubt about where she lands.”

Opinion Columns

Ulltveit-Moe also has chosen to wield influence on debate in Norway through op-ed columns. She has written at least 80 of them for Dagens Naeringsliv in seven years and continues to write for the paper.

It’s an example of how she purposely makes time for work she enjoys. To balance that with family life, she’s abandoned hobbies and leisure in favor of spending time with her husband, Jens Ulltveit-Moe, a founder and chief executive officer of investment firm Umoe, and her children, a daughter age nine and a son, 18.

“You can’t manage everything and you have to make some choices. I find that I really like my job,” she said. “I do my job and then I have two children and a husband that I am very much fond of. I don’t go out very much.”

Before it's here, it's on the Bloomberg Terminal.