EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/26616
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorvan der Ploeg, Fredericken_US
dc.contributor.authorVenables, Anthony J.en_US
dc.date.accessioned2009-03-17en_US
dc.date.accessioned2009-07-28T08:48:59Z-
dc.date.available2009-07-28T08:48:59Z-
dc.date.issued2009en_US
dc.identifier.urihttp://hdl.handle.net/10419/26616-
dc.description.abstractA windfall of natural resource revenue (or foreign aid) faces government with choices of how to manage public debt, investment, and the distribution of funds for consumption, particularly if the windfall is both anticipated and temporary. We show that the permanent income hypothesis prescription of an ever-lasting increase in consumption financed by borrowing ahead of the windfall and then accumulating a Sovereign Wealth Fund (SWF) is not optimal for capital-scarce developing economies. Such countries should accumulate public and private capital to accelerate their development and, only if the windfall is large relative to initial foreign debt, is it optimal to build a SWF. The optimal time profile of consumption is biased towards the near future, as compared to the permanent income hypothesis. Outcomes depend on instruments available to government. We study cases where the government can make lump-sum transfers to consumers; where such transfers are impossible so optimal policy involves cutting distortionary taxation in order to raise investment and wages; and where Ricardian consumers can borrow against future revenues, in which case the policy response to possible over-consumption is a high level of investment in infrastructure.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2571en_US
dc.subject.jelE60en_US
dc.subject.jelF34en_US
dc.subject.jelF35en_US
dc.subject.jelF43en_US
dc.subject.jelH21en_US
dc.subject.jelH63en_US
dc.subject.jelO11en_US
dc.subject.jelQ33en_US
dc.subject.ddc330en_US
dc.subject.keywordNatural resource revenueen_US
dc.subject.keywordwindfall public revenuesen_US
dc.subject.keywordrisk premium on foreign debten_US
dc.subject.keywordpublic infrastructureen_US
dc.subject.keywordprivate investmenten_US
dc.subject.keywordcredit constraintsen_US
dc.subject.keywordoptimal fiscal policyen_US
dc.subject.keyworddebt managementen_US
dc.subject.keywordSovereign Wealth Funden_US
dc.subject.keywordasset holding subsidyen_US
dc.subject.keyworddeveloping economiesen_US
dc.subject.stwRohstoffwirtschaften_US
dc.subject.stwÖffentliche Einnahmenen_US
dc.subject.stwWindfall Profiten_US
dc.subject.stwStaatsfondsen_US
dc.subject.stwFinanzpolitiken_US
dc.subject.stwInvestitionspolitiken_US
dc.subject.stwDebt Managementen_US
dc.subject.stwTheorieen_US
dc.subject.stwEntwicklungsländeren_US
dc.titleHarnessing windfall revenues: optimal policies for resource-rich developing economiesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn593924908en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

Files in This Item:
File Description SizeFormat
593924908.PDF406.34 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.