Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86806
Authors: 
van Wijnbergen, Sweder
Budina, Nina
Year of Publication: 
2011
Series/Report no.: 
Tinbergen Institute Discussion Paper 11-068/2
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.
Subjects: 
volatility
oil wealth
fiscal sustainability
JEL: 
E21
E27
Document Type: 
Working Paper

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