Natural-Resource Depletion, Habit Formation, and Sustainable Fiscal Policy : Lessons from Gabon / Jan-Peter Olters, Daniel Leigh.

Format:

Book

Government document

Author/Creator:

Olters, Jan-Peter.

Contributor:

Leigh, Daniel.

Series:

IMF Working Papers; Working Paper ; No. 2006/193

IMF Working Papers

Language:

English

Subjects (All):

Natural resources--Gabon.

Natural resources.

Fiscal policy--Gabon.

Fiscal policy.

Physical Description:

1 online resource (30 p.)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2006.

Language Note:

English

Summary:

While models based on Friedman's (1957) permanent-income hypothesis can provide oilproducing countries with long-run fiscal targets, they usually abstract from short-run costs associated with consolidation. This paper proposes a model that takes such adjustment costs (or "habits") into account. Further operational realism is added by permitting differential interest rates on sovereign debt and financial assets. The approach is applied to Gabon, where oil reserves are expected to be exhausted in 30 years. The results suggest that Gabon's current fiscal-policy stance cannot be maintained, while the presence of habits justifies smoothing the bulk of the adjustment toward the sustainable level over three to five years.

Contents:

""Contents""; ""I. INTRODUCTION""; ""II. BACKGROUND ""; ""III. THEORETICAL FRAMEWORK""; ""IV. RESULTS AND SENSITIVITY TESTS""; ""V. EXTENSIONS""; ""VI. CONCLUDING REMARKS AND FUTURE RESEARCH AGENDA""; ""References""

Notes:

"August 2006."

Includes bibliographical references.

Description based on print version record.

ISBN:

9786613820709

9781462363926

146236392X

9781452748122

1452748128

9781282392274

1282392271

9781451991130

1451991134

OCLC:

712989248