Trinidad and Tobago: The Energy Boom and Proposals for a Sustainable Fiscal Policy

Author/Editor: Velculescu, Delia ; Rizavi, Saqib ; International Monetary Fund. Western Hemisphere Dept.
Publication Date: October 01, 2005
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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: Trinidad and Tobago is experiencing an energy boom stronger than the ones in 1970s and 1980s. The main fiscal policy challenge is to ensure that the increased revenues from the ultimately exhaustible resources are used in a way that protects the competitiveness of the nonenergy sector, builds assets to ensure intergenerational equity, and provides a cushion for stabilization. This paper derives estimates of a sustainable level of primary fiscal balance using Friedman's permanent income hypothesis. These estimates can be used as a guide for the formulation of medium- and long-term fiscal policy frameworks.
Series: Working Paper No. 05/197
Subject(s): Oil revenues | Trinidad and Tobago | Fiscal policy

Author's Keyword(s): Trinidad and Tobago | oil boom | permanent income hypothesis
Publication Date: October 01, 2005
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2005197 Pages: 23
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