Cyclical Fiscal Rules for Oil-Exporting Countries

WPIEA2013229 Image
Price:  $18.00

Author/Editor: Stephen Snudden
Release Date: © November, 2013
ISBN : 978-1-47551-401-8
Stock #: WPIEA2013229
English
Stock Status: On back-order

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Description

Structural budget-balance rules with countercyclical elements appear well suited to stabilize the macroeconomic volatility of oil-exporting countries and have been used successfully by other commodity exporters. Using a global DSGE model, the efficient design of such rules is found to depend on the source of oil price fluctuations and the oil exporters’ structural characteristics. The output-inflation tradeoff is of particular concern for oil exporters relative to non-oil exporters due to the pass through of oil prices into headline inflation. Fiscal rules are best when coordinated with inflation targeting monetary policy, but are still desirable for fixed exchange rate regimes.

Taxonomy

Economic policy , Fiscal policy




More publications in this series: Working Papers


More publications by: Stephen Snudden