Fiscal Rules For Resource Windfall Allocation
Download Fiscal Rules For Resource Windfall Allocation PDF/ePub or read online books in Mobi eBooks. Click Download or Read Online button to get Fiscal Rules For Resource Windfall Allocation book now. This website allows unlimited access to, at the time of writing, more than 1.5 million titles, including hundreds of thousands of titles in various foreign languages.
Fiscal Rules for Resource Windfall Allocation
Author: Keyra Primus
language: en
Publisher: International Monetary Fund
Release Date: 2016-09-21
Managing resource revenues is a critical policy issue for small open resource-rich countries. This paper uses an open economy dynamic stochastic general equilibrium model to analyze the transmission of resource price shocks and a shock to resource production in the Trinidad and Tobago economy. It also applies alternative fiscal rules to determine the optimal allocation of resource windfalls between spending today and saving in a sovereign wealth fund. The results show that spending all the resource windfall on consumption and investment creates more volatility and amplifies Dutch disease effects, when compared to the case where all the excess revenues are saved. Also, neither a policy of full spending nor full saving of the surplus revenue inflows is optimal if the government is concerned about both household welfare and fiscal stability. In order to minimize deviations from both objectives, the optimal fiscal response suggests that a larger fraction of the resource windfalls should be saved.
Fiscal Rules for Resource Windfall Allocation
Author: Keyra Primus
language: en
Publisher: International Monetary Fund
Release Date: 2016-09-16
Managing resource revenues is a critical policy issue for small open resource-rich countries. This paper uses an open economy dynamic stochastic general equilibrium model to analyze the transmission of resource price shocks and a shock to resource production in the Trinidad and Tobago economy. It also applies alternative fiscal rules to determine the optimal allocation of resource windfalls between spending today and saving in a sovereign wealth fund. The results show that spending all the resource windfall on consumption and investment creates more volatility and amplifies Dutch disease effects, when compared to the case where all the excess revenues are saved. Also, neither a policy of full spending nor full saving of the surplus revenue inflows is optimal if the government is concerned about both household welfare and fiscal stability. In order to minimize deviations from both objectives, the optimal fiscal response suggests that a larger fraction of the resource windfalls should be saved.
IMF Research Bulletin, December 2016
Author: International Monetary Fund. Research Dept.
language: en
Publisher: International Monetary Fund
Release Date: 2016-12-30
The Research Summaries in this issue of the IMF Research Bulletin cover “Tax Capacity and Growth” (by Vitor Gaspar, Laura Jaramillo, and Philippe Wingender), and “U.S. Shale Revolution and Its Spillover Effects on the Global Economy” (Ravi Balakrishnan, Keiko Honjo, Akito Matsumoto, and Andrea Pescatori). The Q&A coauthored by Amadou Sy and Mariama Sow covers “Seven Questions about the Relationship between Country Finance and Governance.” A listing of recent IMF Working Papers, Staff Discussion Notes, and Recommended Readings from IMF Publications is included in the IMF Research Bulletin. Readers can also find news on free-to-view articles from IMF Economic Review and a call for conference papers in this issue of the Bulletin.