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

Salwa Al Jabri, Mala Raghavan () and Joaquin Vespignani

Energy Economics, 2022, vol. 111, issue C

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 government revenue and GDP variation, 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 directly 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)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
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)
Working Paper: Oil prices and fiscal policy in an oil-exporter country: empirical evidence from Oman (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:111:y:2022:i:c:s0140988322002638

DOI: 10.1016/j.eneco.2022.106103

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