International Journal of Energy Economics and Policy Sensitivity of Fiscal Balances to Oil Price Shocks: Short and Long Term Effects in the Context of Oman

Ibrahim, Omer; Devesh, Sonal; Hassan, Hisham Mohamed

doi:10.2139/ssrn.3442812

Cited by 6 publications

(5 citation statements)

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“…Specifically, the study noted that oil shocks inversely impacted on output growth, just as periods of booms/positive oil shocks have restricted effect in triggering growth in the economy. Contrary to the above adverse effect of oil revenue on capital formation and using the Vector Autoregressive (VAR) technique, Ibrahim et al (2019) found that oil price and oil revenue actually Granger cause capital formation in Oman.…”

Section: Empirical Literature Reviewmentioning

confidence: 83%

Oil Price Transmission, Deficit Financing and Capital Formation

2022

JEM

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This study investigated the magnitude of the transmission effect from oil price, to deficit financing, and capital formation using the Generalised Method of Moment approach. Based on the Nigerian data, the findings reveals a significant but small inverse oil price transmission effect, through the oil revenue channel to deficit financing. This indicates that growth in public spending is currently pacing faster than government revenue, due to poor fiscal management. In contrast, the transmission effect from oil price, through the oil revenue and deficit financing channels, to capital formation is significantly positive but minute in magnitude. The weak response of capital formation to the transmission effect from oil price, is due to the increasing use of oil proceeds in funding government's recurrent outlays over the years. Hence, channelling positive growth in oil prices, and repositioning the use of deficit financing to growing capital formation as against consumption demands, will increase diversification of government revenue base and investors' confidence in the economy through growth in FDI inflows.

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Section: Empirical Literature Reviewmentioning

confidence: 83%

Oil Price Transmission, Deficit Financing and Capital Formation

2022

JEM

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“…The results of the study showed that the increase in the price of fuel oil had a negative impact on the economy of Indonesia. A similar study was conducted by Ibrahim et al (2019) using the example of Oman and determined the Granger causality between oil prices and GDP growth, capital accumulation and inflation. Hajiyev and Rustamov (2019) constructed cointegrated vector autoregressive model for Azerbaijan to study the reaction of inflation to oil price shocks.…”

Section: Literature Reviewmentioning

confidence: 95%

The Impact of Oil Prices on the Global Competitiveness of National Economies

Mukhamediyev

Temerbulatova

2019

IJEEP

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The influence of various factors on the competitiveness of national economies is investigated in many articles, however, there is little research on the impact of resource prices on it. This article aims to examine the effect of crude oil prices on the global competitiveness of both producing countries and countries consuming oil. Based on annual data from 60 countries for 2006-2017, a regression analysis of panel data with fixed effects shows that exceeding the annual growth rate of oil prices over gross domestic product growth rates reduces the growth rate of the global competitiveness index (GCI), and it is twice strong for oil exporting countries than for countries non-oil exporters. And the growth of average labor productivity, total factor productivity, the share of employed in the total population, High-technology exports, and the Gross capital formation raises the country's GCI. Due to the rise in world oil prices, exporting countries are moving downward in the global competitiveness ranking more than non-oil exporters.

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“…For example, with rising oil prices, oil consumption per capita in the Gulf Cooperation Council countries is growing rapidly, while in some developed countries, such as the United States of America and Japan, there is a downward trend. Ibrahim et al (2019) in their article, they consider vector autoregression models and sensitivity to oil price shocks in the short and long term, using Oman's budget balance sheet and annual data for the period 1980-2016. Also, Granger Causality Analysis, Variance Decomposition Analysis and Impulse Response Analysis were conducted.…”

Section: The Impact Of Oil Prices On Government Revenues and Expendit...mentioning

confidence: 99%

The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan

Humbatova

2023

IJEEP

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Since Azerbaijan is one of the oil exporting countries, its macroeconomic indicators, especially the exchange rate, the state budget are highly dependent on the oil factor. This study assessed the role of oil in the economy and the impact of the oil factor on the revenues and expenditures of the state budget of Azerbaijan in manat and dollar terms. The study covers the period 2005m03 − 2022m05. Unit root (Augmented Dickey−Fuller (ADF), Phillips−Perron (PP) and Kwiatkowski−Phillips−Schmidt−Shin (KPSS)) tests were applied to check the stationarity of variables (time series). ARDL was applied as a research method. In terms of the reliability of the obtained results, the error correction model (ECM) was used, standard tests were carried out, and the joint integration methods of FMOLS, DOLS and CCR were also applied in the evaluation. Engel−Granger and Phillips−Ouliaris tests have been used to test for cointegration interactions between variables. Short−term, long−term, and strong associations between variables were also calculated. The results of the study showed that the state budget depends on the oil and gas sector, and fluctuations in world oil prices functionally and along the chain affect oil revenues and the state budget. A different impact of oil prices (oil revenues) on the state budget in terms of manat and dollar was the devaluation of the manat, which was carried out to reduce the impact of the global financial and economic crisis on Azerbaijan. The general conclusion of the study was a recommendation to further accelerate work on the diversification of the economy and the development of the non−oil sector. The results of the conducted research can serve as a scientific basis for the economic policy of the state aimed at reducing the impact of external oil price shocks on the economy of Azerbaijan and other similar oil−exporting countries, including on the state budget, and diversifying the economy. The functional dependencies of the income and expenses of the state budget in terms of manat and dollar on world oil prices are given below.

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International Journal of Energy Economics and Policy Sensitivity of Fiscal Balances to Oil Price Shocks: Short and Long Term Effects in the Context of Oman

Cited by 6 publications

References 0 publications

Oil Price Transmission, Deficit Financing and Capital Formation

Oil Price Transmission, Deficit Financing and Capital Formation

The Impact of Oil Prices on the Global Competitiveness of National Economies

The Impact of Oil Prices on State Budget Income and Expenses: Case of Azerbaijan

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