 Cyclical Fiscal Rules for Oil-Exporting CountriesNo 2013/229, IMF Working Papers from International Monetary Fund Abstract: Structural budget-balance rules with countercyclical elements appear well suited to stabilize the macroeconomic volatility of oil-exporting countries and have been used successfully by other commodity exporters. Using a global DSGE model, the efficient design of such rules is found to depend on the source of oil price fluctuations and the oil exporters’ structural characteristics. The output-inflation tradeoff is of particular concern for oil exporters relative to non-oil exporters due to the pass through of oil prices into headline inflation. Fiscal rules are best when coordinated with inflation targeting monetary policy, but are still desirable for fixed exchange rate regimes. Keywords: WP; demand shock; exchange rate; Fiscal policy rules; automatic stabilizers; countercyclical fiscal policy; macroeconomic policy; oil price; headline inflation; oil-revenues gap; consumption basket; tax-revenue gap; core-inflation targeting monetary policy regime; commodity price uncertainty; structural surplus; fiscal policy stance; core inflation; oil-price shock; countercyclical monetary policy; fiscal policy behavior; Oil; Oil prices; Fiscal rules; Inflation; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2013/229 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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