Nonrenewable Resources: A Case for Persistent Fiscal Surpluses

March 1, 1999

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Format: Chicago

Max Alier, and Martin D Kaufman. Nonrenewable Resources: A Case for Persistent Fiscal Surpluses, (USA: International Monetary Fund, 1999) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines whether there is a case for temporary but persistent fiscal surpluses in economies heavily endowed with nonrenewable resources. It finds that there generally is a case. Fiscal surpluses permit replacing nonfinancial wealth with financial assets, the return on which increases public consumption possibilities of future generations for a constant across-generation tax burden. The more biased are a government’s preferences toward present generations, the lower will be the initial surpluses; the larger the finite endowment, the larger the initial surpluses. In a more general framework, including public investment, the proposition could be rephrased by replacing surpluses with stronger initial fiscal positions.

Subject: Environment, Expenditure, Fiscal policy, Fiscal stance, Non-renewable resources, Tax incidence, Tax policy

Keywords: Chile, Copper-price discount, Deficit, Deficits to endowment size, Depletion issue, Economic value, Expenditure case, Fiscal policy, Fiscal stance, Intergenerational transfer, Nonrenewable resources, Non-renewable resources, Overlapping generation model, Price, Resource, Surplus, Surplus move, Tax incidence, WP

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1999/044
Stock No:

WPIEA0441999
ISBN:

9781451846393
ISSN:

1018-5941

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