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Measuring the importance of oil-related revenues in total fiscal income for Mexico

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  • Reyes-Loya, Manuel Lorenzo
  • Blanco, Lorenzo
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    Abstract

    Revenues from oil exports are an important part of government budgets in Mexico. A time-series analysis is conducted using monthly data from 1990 to 2005 examining three different specifications to determine how international oil price fluctuations and government income generated from oil exports influence fiscal policy in Mexico. The behavior of government spending and taxation is consistent with the spend-tax hypothesis. The results show that there is an inverse relationship between oil-related revenues and tax revenue from non-oil sources. Fiscal policy reform is urgently needed in order to improve tax collection as oil reserves in Mexico become more and more depleted.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Economics.

    Volume (Year): 30 (2008)
    Issue (Month): 5 (September)
    Pages: 2552-2568

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    Handle: RePEc:eee:eneeco:v:30:y:2008:i:5:p:2552-2568

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    Web page: http://www.elsevier.com/locate/eneco

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    9. Jos� A. Tijerina-Guajardo & Jos� A. Pag�n, 2003. "Government Spending, Taxation, and Oil Revenues in Mexico," Review of Development Economics, Wiley Blackwell, vol. 7(1), pages 152-164, February.
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    Cited by:
    1. Ilkin Sabiroglu & Samad Bashirli & Faiq Qasimli, 2011. "Creating a Favourable Deployment Mechanism of Oil and Gas Revenues with Regard to Volatile Oil Prices: The Case of Azerbaijan," Transition Studies Review, Springer, vol. 18(1), pages 179-199, September.
    2. Brückner, Markus & Chong, Alberto & Gradstein, Mark, 2012. "Estimating the permanent income elasticity of government expenditures: Evidence on Wagner's law based on oil price shocks," Journal of Public Economics, Elsevier, vol. 96(11), pages 1025-1035.
    3. Fullerton, Thomas M., Jr. & Munoz Sapien, Gabriel & Barraza de Anda, Martha P. & Dominguez Ruvalcaba, Lisbeily, 2011. "Dinámica del Consumo de Gasolina en Ciudad Juárez, Chihuahua
      [Gasoline Consumption Dynamics in Ciudad Juárez, Chihuahua]
      ," MPRA Paper 46853, University Library of Munich, Germany, revised 15 Jun 2012.

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