Oil prices and fiscal policy in an oil-exporter country: empirical evidence from Oman

Salwa Aljabri (), Mala Raghavan () and Joaquin Vespignani
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Salwa Aljabri: Tasmanian School of Business & Economics, University of Tasmania, http://www.utas.edu.au/business-and-economics

No 2021-04, Working Papers from University of Tasmania, Tasmanian School of Business and Economics

Abstract: This paper studies the impact of oil price shocks on fiscal policy and real GDP in Oman using new unexplored data. We find that an oil price shock explains around 22% and 46% of the variation in the government revenue and GDP, respectively. Decomposing the government revenue and GDP further into petroleum and non-petroleum related components, we find that an oil price shock explains around 26% of the variation in petroleum revenue and 90% of the petroleum-GDP. Though petroleum and non-petroleum GDP respond positively to oil price shocks, government expenditure is not affected by oil prices but is affected by government revenue. The results suggest that the Omani government uses its reserve fund and local and international debt to smooth and reduce the impact of oil price fluctuations

Keywords: oil price shocks; fiscal policy; GDP; SVAR (search for similar items in EconPapers)
JEL-codes: C32 E17 E62 N15 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2021
New Economics Papers: this item is included in nep-ara, nep-ene, nep-isf and nep-mac
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Published by the University of Tasmania. Discussion paper 2021-04

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Related works:
Journal Article: Oil prices and fiscal policy in an oil-exporter country: Empirical evidence from Oman (2022)
Working Paper: Oil prices and fiscal policy in an oil-exporter country: Empirical evidence from Oman (2021)
Working Paper: Oil Prices and Fiscal Policy in an Oil-exporter country: Empirical Evidence from Oman (2021)
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