The Russian Oil Fund as a Tool of Stabilization and Sterilization
AbstractThe favorable world oil price dynamics has resulted in mounting reserves in the Russian Oil Stabilization Fund (OSF). This has raised the issue of an adequate economic policy response. Initially, the OSF was set up to reduce the vulnerability of the budget to the oil price volatility and to sterilize the impact of oil-related foreign exchange infl ows on the money supply. Our fi ndings suggest that the OSF has been instrumental in achieving both goals: it has contributed to macroeconomic stability and has helped decouple the GDP growth rate from oil price dynamics. However, given the current size of the OSF and a widely shared expectation that oil prices will remain comparatively high, the present dilemma is whether the OSF should be increasingly spent or whether it should be saved as a wealth-generating vehicle. Spending from the OSF on a current basis has been resisted so far largely because of rampant corruption and fears of infl ation. However, there are several arguments which may support a change in this policy stance. In particular, it seems that concerns about intergenerational solidarity are of minor relevance for Russia; investments in the country’s infrastructure are badly needed which, via productivity gains, might counteract the possible Dutch disease effects; moreover, spending on public sector wages could reduce incentives for corruption.
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Bibliographic InfoArticle provided by Oesterreichische Nationalbank (Austrian Central Bank) in its journal Focus on European Economic Integration.
Volume (Year): (2007)
Issue (Month): 1 ()
Postal: Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria
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- Jerger, Jürgen & Migrow, Dimitri, 2009.
"Stabilisierungsfonds und makroökonomische Governance,"
University of Regensburg Working Papers in Business, Economics and Management Information Systems
433, University of Regensburg, Department of Economics.
- Jürgen Jerger & Dimitri Migrow, 2009. "Stabilisierungsfonds und makroökonomische Governance," Working Papers 274, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
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