Global Imbalances and Petrodollars

IMF Working Papers, April 1, 2009

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Global Imbalances and Petrodollars

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Bibliographic details

• Authors: Fuad Hasanov, Rabah Arezki
• Published: April 1, 2009
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451872361.001

Summary / Core findings

• Oil exporters have run large current account surpluses.
• Current account dynamics are estimated for oil-exporting countries and the rest of the world.
• Fiscal policy has a much stronger effect on the current account of oil exporters than on the current account of other countries.
• The current account adjustment of oil-exporting countries is faster than that of other countries.
• A change in fiscal policy of oil exporters can have significant and speedy impact on global imbalances.

Methodology and scope

• Comparative estimation of current account dynamics for:
  • Oil-exporting countries.
  • The rest of the world.
• Focused variables and topics: Current account, Fiscal stance, Oil, Oil prices, Terms of trade.

Policy implications and recommendations

• Fiscal policy in oil-exporting countries is a key lever for influencing global current account imbalances.
• Policymakers in oil-exporting countries can achieve relatively rapid current account adjustments through fiscal policy changes.
• Coordination of fiscal actions by oil exporters could materially affect the evolution and resolution of global imbalances.

Keywords and taxonomy

• Subject: Current account, Fiscal stance, Oil, Oil prices, Terms of trade
• Keywords: exporter, exporters' current account, exporters' current account dynamics, oil exporter, price, WP

Global Imbalances and Petrodollars — Fuad Hasanov and Rabah Arezki, April 1, 2009