Fiscal sustainability, volatility and oil wealth: a stochastic analysis of fiscal spending rules
| Authors |
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| Publication date |
2011
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| Journal |
Economics of Transition
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| Volume | Issue number |
19 | 4
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| Pages (from-to) |
639-666
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| Organisations |
-
Faculty of Economics and Business (FEB) - Amsterdam School of Economics Research Institute (ASE-RI)
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| Abstract |
Whether fiscal policy is sustainable depends on a government’s future revenue and expenditure streams, both of which are highly uncertain. In commodity-rich countries, this problem is intensified by unpredictable and volatile commodity prices. We show how spending rules for oil income and non-oil primary deficits interact and influence the stochastic distribution of future debt stocks and demonstrate the variance reducing impact of feedback rules for primary deficits in a case study of oil-and-gas exporter Azerbaijan.
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| Document type |
Article
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| Language |
English
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| Published at |
https://doi.org/10.1111/j.1468-0351.2011.00425.x
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