Equilibrium Non-Oil Current Account Assessments for Oil Producing Countries

Jun Il Kim, Aqib Aslam () and Alun H. Thomas

No 08/198, IMF Working Papers from International Monetary Fund

Abstract: This paper introduces a methodology for assessing external balance in countries with large stocks of non-renewable resources based on oil stock data, and applies it to selected oil producing countries. The methodology uses a stock approach (instead of the more traditional flow approach) to estimate the equilibrium non-oil current account consistent with optimal consumption smoothing. One of the benefits of the stock approach is that geological data for oil reserves can be used to estimate oil wealth; however, the methodology makes the estimated non-oil current account norm very sensitive to oil price projections. Based on an oil price about US$70 per barrel prevailing in the summer of 2007, the baseline estimates indicate that the non-oil current accounts for most of the countries in the sample are broadly in equilibrium. By the same token, using oil price projections as of the summer of 2008 implies large disparities between the equilibrium non-oil current account position and the medium term forecast for all countries in the sample except for Malaysia.

Keywords: Nonoil sector; Oil producing countries; Current account balances; Oil prices; Exchange rate assessments; Economic models; Working Paper (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-opm and nep-sea
Date: 2008-08-20
View list of references

Downloads: (external link)
http://www.imf.org/external/pubs/ft/wp/2008/wp08198.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:imf:imfwpa:08/198

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund
Address: International Monetary Fund, Washington, DC USA
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().