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The value of fiscal discipline for oil-exporting countries

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  • Pieschacón, Anamaría
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    Abstract

    The value of fiscal discipline is assessed by analyzing the role of fiscal policy as a transmission mechanism of oil price shocks in oil-exporting small open economies. Fiscal policy is an important propagation channel. Taking policy as given by the data, the model can successfully explain the responses of key macroeconomic variables, but it is unable to explain these responses under counterfactual fiscal frameworks. Interestingly, fiscal policy also seems capable of regulating the size of pass-through. Furthermore, fiscal policies that insulate the economy from oil price shocks seem to be welfare improving over procyclical ones.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Monetary Economics.

    Volume (Year): 59 (2012)
    Issue (Month): 3 ()
    Pages: 250-268

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    Handle: RePEc:eee:moneco:v:59:y:2012:i:3:p:250-268

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    Web page: http://www.elsevier.com/locate/inca/505566

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    Cited by:
    1. Jair N. OJeda & Julián A. Parra Polanía & Carmiña O. Vargas, 2014. "Natural-Resource Booms, Fiscal Rules and Welfare in a Small Open Economy," Borradores de Economia 807, Banco de la Republica de Colombia.

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