Rethinking Fiscal Policy in Oil-Exporting Countries /

We examine the existing fiscal policy paradigm in commodity-exporting countries. First, we argue that its centerpiece-the permanent income hypothesis (PIH)-is not consistent with either intergenerational equity or long-term sustainability in the presence of uncertainty. Policies to achieve these goa...

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Bibliografische gegevens
Hoofdauteur: Mirzoev, Tokhir
Andere auteurs: Zhu, Ling
Formaat: Tijdschrift
Taal:English
Gepubliceerd in: Washington, D.C. : International Monetary Fund, 2019.
Reeks:IMF Working Papers; Working Paper ; No. 2019/108
Online toegang:Full text available on IMF
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520 3 |a We examine the existing fiscal policy paradigm in commodity-exporting countries. First, we argue that its centerpiece-the permanent income hypothesis (PIH)-is not consistent with either intergenerational equity or long-term sustainability in the presence of uncertainty. Policies to achieve these goals need to be more prudent and better anchored than the PIH. Second, we point out the presence of a volatility tradeoff between government spending and wealth and re-assess long-held views on the appropriate fiscal anchors, the vice of procyclicality, and the (im)possibility of simultaneously smoothing consumption and ensuring intergenerational equity and sustainability. Finally, we propose what we call a prudent wealth stabilization policy that would be more consistent with long-term fiscal policy goals, yet relatively simple to implement and communicate. 
538 |a Mode of access: Internet 
700 1 |a Zhu, Ling. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2019/108 
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