Fiscal Policy and Economic Cycles in Oil-Exporting Countries

23 Pages Posted: 18 Dec 2008

See all articles by Kamilya Tazhibayeva

Kamilya Tazhibayeva

University of Chicago

Anna Ter-Martirosyan

International Monetary Fund (IMF)

Aasim Husain

International Monetary Fund (IMF) - Research Department

Date Written: November 2008

Abstract

This paper empirically assesses the impact of oil price shocks on the underlying non-oil economic cycle in oil-exporting countries. Panel VAR analysis and the associated impulse responses indicate that in countries where the oil sector is large in relation to the economy, oil price changes affect the economic cycle only through their impact on fiscal policy. Once fiscal policy changes are removed, oil price shocks do not have a significant independent effect on the economic cycle.

Keywords: Oil exporting countries, Fiscal policy, Business cycles, Oil prices, Nonoil sector, Economic growth, Economic models

Suggested Citation

Tazhibayeva, Kamilya and Ter-Martirosyan, Anna and Husain, Aasim, Fiscal Policy and Economic Cycles in Oil-Exporting Countries (November 2008). IMF Working Paper No. 08/253, Available at SSRN: https://ssrn.com/abstract=1316721

Kamilya Tazhibayeva

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Anna Ter-Martirosyan

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Aasim Husain (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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