Fiscal sustainability, volatility and oil wealth: a stochastic analysis of fiscal spending rules
| Authors |
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| Publication date | 2011 |
| Journal | Economics of Transition |
| Volume | Issue number | 19 | 4 |
| Pages (from-to) | 639-666 |
| Organisations |
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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. |
| Document type | Article |
| Language | English |
| Published at |
https://doi.org/10.1111/j.1468-0351.2011.00425.x
(Final published version)
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