Policy Development and Review and Research Departments Equilibrium Non-Oil Current Account Assessments for Oil Producing Countries (original) (raw)
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Equilibrium Non-Oil Current Account Assessments for Oil Producing Countries
IMF Working Papers, 2008
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper introduces a methodology for assessing external balance in countries with large stocks of non-renewable resources based on oil stock data, and applies it to selected oil producing countries. The methodology uses a stock approach (instead of the more traditional flow approach) to estimate the equilibrium non-oil current account consistent with optimal consumption smoothing. One of the benefits of the stock approach is that geological data for oil reserves can be used to estimate oil wealth; however, the methodology makes the estimated non-oil current account norm very sensitive to oil price projections. Based on an oil price about US$70 per barrel prevailing in the summer of 2007, the baseline estimates indicate that the non-oil current accounts for most of the countries in the sample are broadly in equilibrium. By the same token, using oil price projections as of the summer of 2008 implies large disparities between the equilibrium non-oil current account position and the medium term forecast for all countries in the sample except for Malaysia. JEL Classification Numbers: E21, F32, F41
Oil shocks and external balances
Journal of International Economics, 2009
We provide estimates of the effects of demand and supply shocks in the global crude oil market on several measures of oil exporters' and oil importers' external balances, including the oil trade balance, the non-oil trade balance, the current account, capital gains, and changes in net foreign assets (NFA). First, we show that the effect of oil demand and supply shocks on the merchandise trade balance and the current account, which depending on the source of the shock can be large, depends critically on the response of the non-oil trade balance. Our results provide evidence of an intermediate degree of international financial integration. Second, we document the presence of large and systematic valuation effects in response to these shocks. Valuation effects overall tend to cushion the effect of oil demand and supply shocks on the NFA positions of oil exporters and oil importers. Third, we quantify the overall importance of global business cycle demand shocks as well as oil-market specific demand and supply shocks for external balances.
Environmental Science and Pollution Research, 2020
Optimal stockpiling is the best possible strategy to overcome the problem of peak oil periods of oil producer economies. We measured the properties of strategic petroleum oil reserve and general equilibrium and its peak oil effects. Measured the optimized scales of SPR through using oil price model, global oil market, and depletion effects of oil production classification. The peak oil period occurs from the interection between the geological era, proficiency in a practical skill, economy of consumers, and geopolitics, and the quality of deciding of demand and supply in which we have done a general dynamic balance model. Results reveal that peak oil time periods may lead towards diverse oil prices time profiles, economic development, and commodity flows. Interestingly, the macroeconomic effects of peak oil and the trajectories in objective function of two options maximize the households' welfare and oil revenues and its effect on growth trajectories of oil-consuming countries. If an oil supply disruption happens, the rate of oil acquisition will be considerably decreased, though it may not be a good strategy to interrupt the activities of oil reserve with the aim of minimizing the overall costs.
Oil rents and fiscal balance in oil dependent economies: do fiscal rules matter?
Asian Journal of Empirical Research, 2017
In this paper, we utilize a panel of oil dependent economies from 2000 to 2015 and attempt to empirically examine the relationship between crude oil rents and fiscal balance, while controlling for other covariates. Our strategy is to highlight the importance of fiscal rules by using an instrumental variable approach based on Dynamic Panel estimators [the General Method of Moment (GMM)]. This is used in comparison with estimations from pooled OLS, LSDV fixed effects, and the IV/2SLS techniques (using each country’s share of world output as instrument). Our pre-estimation diagnostics showed that the GMM approach might not be applicable to the small sample, and we suspected that the IV/2SLS method might also be weak in testing our hypothesis for the oil dependent economies; therefore we maintained the LSDV Fixed effects estimations. Our estimation results shows that in countries with fiscal rules, there is insignificant reaction of fiscal balance to changes in oil rents shocks, and the impact is weak. We find also that welfare spending, which was captured by the real GDP per capita, affects fiscal balance, and so does the budgetary variable, i.e. debt-to-GDP ratio, and the ability of the government to curb corruption and mismanagement of funds, which is politically motivated.
Trade Balance and Oil Shocks in African Oil Exporting Countries
International Journal of Finance & Banking Studies (2147-4486), 2021
This paper is driven by the vast influence oil money have on the current account balance of major oil producing countries in Africa and the role policy measures could play to soften these effects. Dwelling on the nonlinear techniques, two types of Threshold Regression were used to estimate data on 8 African countries from 1995-2019. The results show evidence of nonlinear impacts of oil revenue on the current account balances of the 8 countries. The nature of the impact relies significantly on the levels of the threshold variable. Precisely, the estimated threshold benchmark for financial development was 33.34; below this threshold the sensitivity of current account balance to crude-oil shocks is higher and the probability of policy measures to mitigate the effects is low and, beyond the threshold the sensitivity of current account balance to crude-oil shocks is low and the probability of policy measure to mitigate the effects is higher. The finding suggested among others that crude-...