Fiscal Policy and Economic Cycles in Oil-Exporting Countries
IMF Working Papers, November 1, 2008
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Bibliographic details
- Authors: Kamilya Tazhibayeva, Aasim M. Husain, Anna Ter-Martirosyan
- Published: November 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451871111.001
Summary and Research Question
- Paper empirically assesses the impact of oil price shocks on the underlying non-oil economic cycle in oil-exporting countries.
- Research question: Do oil price changes directly affect the non-oil economic cycle, or only indirectly through fiscal policy?
Methods
- Empirical approach: Panel VAR analysis and associated impulse responses.
- Scope: Oil-exporting countries with varying relative sizes of the oil sector in the economy.
Key Findings
- In countries where the oil sector is large in relation to the economy, oil price changes affect the economic cycle only through their impact on fiscal policy.
- Once fiscal policy changes are removed, oil price shocks do not have a significant independent effect on the economic cycle.
Policy Implications and Interpretation
- Fiscal policy responses to oil price changes are the primary channel through which oil price shocks influence the non-oil economic cycle in large oil-sector economies.
- Managing fiscal policy adjustments can therefore mitigate or amplify the macroeconomic effects of oil price volatility.
Publication and Metadata
- Title: Fiscal Policy and Economic Cycles in Oil-Exporting Countries
- Authors: Kamilya Tazhibayeva, Aasim M. Husain, Anna Ter-Martirosyan
- Date: November 1, 2008
- Series: Working Paper No. 2008/253
- Issue: 253
- Volume: 2008
- Pages: 21
- DOI: https://doi.org/10.5089/9781451871111.001
- ISBN: 9781451871111
- ISSN: 1018-5941
- Subject: Expenditure, Fiscal policy, Fiscal stance, Oil, Oil prices
- Keywords: oil price, output, price, WP
Source: IMF Working Paper — Fiscal Policy and Economic Cycles in Oil-Exporting Countries (Kamilya Tazhibayeva, Aasim M. Husain, Anna Ter-Martirosyan), November 1, 2008; DOI: https://doi.org/10.5089/9781451871111.001