External Adjustment in Oil Exporters: The Role of Fiscal Policy and the Exchange Rate

Alberto Behar () and Armand Fouejieu

No 2017-08, CSAE Working Paper Series from Centre for the Study of African Economies, University of Oxford

Abstract: After the decline in oil prices, many oil exporters face the need to improve their external balances. Special characteristics of oil exporters make the exchange rate an ineffective instrument for this purpose and give fiscal policy a sizeable role. These conclusions are supported by regression analysis of the determinants of the current account balance and of the trade balance. The results show little or no relationship with the exchange rate and, especially for the less diversified oil exporters, a strong relationship with the fiscal balance or government spending.

Keywords: Oil exporters; current account; trade balance; fiscal policy; exchange rates; trade volume elasticities; Marshall Lerner conditions (search for similar items in EconPapers)
JEL-codes: E62 F13 F32 F41 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-acc, nep-ene, nep-mac and nep-opm
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: External adjustment in oil exporters: The role of fiscal policy and the exchange rate (2018)
Working Paper: External Adjustment in Oil Exporters: The Role of Fiscal Policy and the Exchange Rate (2016)
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