The last part of our study covers the period from the eventful year of 1986 to the present day. The starting point represents the onset of the greatest economic and financial crisis in Norway since the interwar period. The end point, the late autumn of 2014, represents the culmination and potential reversal of one of the most long-lasting economic booms in the country. In a sense this part ends with a déjà vu of 1986.

The three decades had strong formative influence on the Norwegian economy and politics. In its course Norway became a very rich country, but also an economy where much hinged on one factor, the oil price, for good and for bad. Although Norway became an altogether more sophisticated and technologically advanced economy, its traditional exposure as an open economy with a dominant resource-extracting bias was segmented and perhaps taken even further. The volatile price fluctuations of raw materials and semi-finished goods in international markets continued to set the pace. After 1986 a decade and more of low and, at times, very low oil prices followed.

The fall produced a substantial crisis, with profound ramifications for the banking industry, but in the aftermath of the crisis and throughout the 1990s, decisive steps were taken to strengthen Norwegian competitiveness and adjust to a less oil-dependent future. Some of these steps were realised through the implementation of important reforms, such as a new monetary policy framework, through revisions to the Norwegian tax system and through concerted efforts to improve the cost-effectiveness of Norwegian export industries. Equally important was the implementation of the sovereign wealth fund mechanism, which was decided many years before actual surpluses materialised. Over time, however, these gains were put under pressure by the strong performance of oil-related activities from the late 1990s. The unprecedented and sustained improvements in the terms of trade in the following fifteen years were to a substantial degree taken out in the form of real wage growth and public welfare provisions.