External adjustment in oil exporters: The role of fiscal policy and the exchange rate

Behar, Alberto; Fouejieu, Armand

doi:10.1111/twec.12593

Cited by 11 publications

(14 citation statements)

References 41 publications

(64 reference statements)

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“…The fiscal policies of these countries are pro-cyclical, and therefore, when the oil price and, thus, oil revenues are high, then there is a fiscal expansion, which results in higher domestic price levels (Sturm et al 2009, among others). Hasanov (2013) for Azerbaijan and Behar and Fouejieu (2016) for the panel of oil exporters, including Russia, Kazakhstan and Azerbaijan, show again the dominant position of fiscal policy and the importance of government spending in the macroeconomic functioning. The Asian Development Bank report discusses tremendous government spending in Azerbaijan especially when oil price was higher (Asian Development Bank 2014).…”

Section: Empirical Estimations and Discussionmentioning

confidence: 99%

The Role of Oil Prices in Exchange Rate Movements: The CIS Oil Exporters

et al. 2017

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Undoubtedly, oil prices play a crucial role in the macroeconomic performances of oil-exporting developing countries. In this regard, the exchange rate is one of the key macroeconomic indicators worthy of investigation. Existing literature shows that world oil prices play an important role in the appreciation of the exchange rates of oil-exporting developing countries. However, only a few studies have examined this issue by considering all three oil-exporting countries of the Commonwealth Independent States, namely Azerbaijan, Kazakhstan and Russia, together. In order to fill this gap and given the increasing importance of these economies in the world's energy markets, this paper examines the role of oil prices in the movement of real effective exchange rates of the above-mentioned CIS countries. We applied the autoregressive distributed lag bounds testing method with a small sample bias correction to the data of these countries over the 2004Q1-2013Q4 period. The estimation results indicate that oil prices are certainly a main driver behind real effective exchange rate appreciation in the selected economies. Moreover, estimations show that productivity, to some extent, can also lead to the appreciation. The policy implication of this research is that an appreciation of the real exchange rate is harmful for the exports of non-oil goods and services in these countries. Since oil prices lead to the appreciation mainly through higher domestic prices, which is a result of tremendous public spending, decision-makers should reconsider the prevailing fiscal policy to make it much more counter-cyclical.

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Section: Empirical Estimations and Discussionmentioning

confidence: 99%

The Role of Oil Prices in Exchange Rate Movements: The CIS Oil Exporters

et al. 2017

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“…For instance, the External Balance Assessment (EBA)-lite, which the IMF (2016) developed, uses an export volume elasticity of -0.71 (and an import volume elasticity of 0.92). For oil-exporting countries, the price elasticity is much smaller, close to zero, because oil exports are priced in U.S. dollars (Behar and Fouejieu 2016). Using cointegration methods without including an exchange rate variable, Aba, Aipi and Irau (2012abc) studied the price elasticity of coffee, cocoa, and palm oil exports in PNG, and found that results are not statistically significant.…”

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confidence: 99%

Adjustment to negative price shocks by a commodity exporting economy: Does exchange rate flexibility resolve a balance of payments crisis?

Nakatani

2018

Journal of Asian Economics

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“…Podobnie, (z kilkoma wyj tkami), producenci ropy s cenobiorcami, wi c ca kowite zyski z eksportu mog nie by istotne. (Behar, 2016).…”

Section: Implikacje Spadku Cen Dla Krajowych Polityk Makroekonomicznychunclassified

“…Ponadto, wysoka zale no od importu oraz ograniczone mo liwo ci substytucji, ograniczaj odpowied wolumenów importu na ruchy cen relatywnych. (Behar, 2016).…”

Section: Implikacje Spadku Cen Dla Krajowych Polityk Makroekonomicznychunclassified

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Spadek cen ropy naftowej w gospodarce światowej – główne przyczyny i konsekwencje. Analiza na przykładzie okresu 2014/2015

Bogołębska

2018

PRS

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The aim of the article is to investigate the main determinants and implications of the fall of oil prices during the period of 2014/2015. The episodes of oil prices’ plunge are not presented in the literature, both theoretical and empirical one, as much as the episodes of price increases. The episodes of plunge are not as common in the economy as episodes of increases, and the negative consequences of the former are supposed not to be as severe as these of the latter. On the basis of the experiences of the last oil price plunge one can see the negative consequences can tackle both exporters and importers. The article is based mainly on two broad reports, of IMF and World Bank, and a set of publications. It discusses the problems of adjustment policy, especially fiscal and exchange rate policies, and structural reforms taken by exporting countries in the process of management of external and fiscal imbalances.

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External adjustment in oil exporters: The role of fiscal policy and the exchange rate

Cited by 11 publications

References 41 publications

The Role of Oil Prices in Exchange Rate Movements: The CIS Oil Exporters

The Role of Oil Prices in Exchange Rate Movements: The CIS Oil Exporters

Adjustment to negative price shocks by a commodity exporting economy: Does exchange rate flexibility resolve a balance of payments crisis?

Spadek cen ropy naftowej w gospodarce światowej – główne przyczyny i konsekwencje. Analiza na przykładzie okresu 2014/2015

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