Advanced Search
MyIDEAS: Login to save this paper or follow this series

Current accounts and oil price fluctuations in oil-exporting countries: the role of financial development

Contents:

Author Info

  • Jean-Pierre Allegret
  • Cécile Couharde
  • Dramane Coulibaly
  • Valérie Mignon

Abstract

Oil-exporting countries usually experience large current account improvements following a sharp increase in oil prices. In this paper, we investigate this oil price-current account relationship on a sample of 27 oil-exporting economies. Relying upon the estimation of panel smooth transition regression models over the 1980-2010 period, we provide evidence that refines the traditional interpretation of oil price effects on current accounts. While current accounts are positively affected by oil price variations, this effect is nonlinear and depends critically on the degree of financial development of oil-exporting economies. More specifically, oil price variations exert a positive impact on the current account position for less financially developed countries, while this influence tends to diminish when the degree of financial deepness augments.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://economix.fr/pdf/dt/2013/WP_EcoX_2013-29.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Paris West - Nanterre la Défense, EconomiX in its series EconomiX Working Papers with number 2013-29.

as in new window
Length: 24 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:drm:wpaper:2013-29

Contact details of provider:
Postal: 200 Avenue de la République, Bât. G - 92001 Nanterre Cedex
Email:
Web page: http://economix.fr
More information through EDIRC

Related research

Keywords: current account; oil price; financial development; panel smooth transition regression models;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Kilian, Lutz, 2006. "Not All Oil Price Shocks Are Alike: Disentangling Demand and Supply Shocks in the Crude Oil Market," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5994, C.E.P.R. Discussion Papers.
  2. Gilbert Colletaz & Christophe Hurlin, 2006. "Threshold Effects of the Public Capital Productivity : An International Panel Smooth Transition Approach," Working Papers, HAL halshs-00008056, HAL.
  3. Bruce E. Hansen, 1997. "Threshold effects in non-dynamic panels: Estimation, testing and inference," Boston College Working Papers in Economics, Boston College Department of Economics 365, Boston College Department of Economics.
  4. Solow, Robert M, 1986. " On the Intergenerational Allocation of Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 88(1), pages 141-49.
  5. Daron Acemoglu & Fabrizio Zilibotti, 1994. "Was Prometheus unbound by chance? Risk, diversification and growth," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 98, Department of Economics and Business, Universitat Pompeu Fabra.
  6. Sophocles Brissimis & George Hondroyiannis & Christos Papazoglou & Nicholas Tsaveas & Melina Vasardani, 2012. "Current account determinants and external sustainability in periods of structural change," Economic Change and Restructuring, Springer, Springer, vol. 45(1), pages 71-95, February.
  7. Rick Van der Ploeg & Tony Venables, 2011. "Harnessing windfall revenues: Optimal policies for resource-rich developing economies," Economics Series Working Papers, University of Oxford, Department of Economics 543, University of Oxford, Department of Economics.
  8. Calista Cheung & Davide Furceri & Elena Rusticelli, 2010. "Structural and Cyclical Factors behind Current-Account Balances," OECD Economics Department Working Papers, OECD Publishing 775, OECD Publishing.
  9. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series, The World Bank 1083, The World Bank.
  10. Menzie D. Chinn & Hiro Ito, 2008. "Global Current Account Imbalances: American Fiscal Policy versus East Asian Savings," Review of International Economics, Wiley Blackwell, Wiley Blackwell, vol. 16(3), pages 479-498, 08.
  11. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, American Economic Association, vol. 67(5), pages 972-74, December.
  12. Bouakez, Hafedh & Kano, Takashi, 2008. "Terms of trade and current account fluctuations: The Harberger-Laursen-Metzler effect revisited," Journal of Macroeconomics, Elsevier, Elsevier, vol. 30(1), pages 260-281, March.
  13. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series, Central Bank of Chile, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (S (ed.), Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084 Central Bank of Chile.
  14. Frederick van der Ploeg & Anthony J. Venables, 2012. "Natural Resource Wealth: The Challenge of Managing a Windfall," Annual Review of Economics, Annual Reviews, Annual Reviews, vol. 4(1), pages 315-337, 07.
  15. Demirguc-Kunt, Asli & Levine, Ross, 2008. "Finance, financial sector policies, and long-run growth," Policy Research Working Paper Series, The World Bank 4469, The World Bank.
  16. Hamilton, James D., 2003. "What is an oil shock?," Journal of Econometrics, Elsevier, Elsevier, vol. 113(2), pages 363-398, April.
  17. Chinn, Menzie D. & Prasad, Eswar S., 2003. "Medium-term determinants of current accounts in industrial and developing countries: an empirical exploration," Journal of International Economics, Elsevier, Elsevier, vol. 59(1), pages 47-76, January.
  18. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 35(2), pages 688-726, June.
  19. Frederick van der Ploeg & Steven Poelhekke, 2009. "Volatility and the natural resource curse," Oxford Economic Papers, Oxford University Press, vol. 61(4), pages 727-760, October.
  20. King, Robert G. & Levine, Ross, 1993. "Finance and growth : Schumpeter might be right," Policy Research Working Paper Series, The World Bank 1083, The World Bank.
  21. Gian-Maria Milesi-Ferretti & Olivier J. Blanchard, 2009. "Global Imbalances," IMF Staff Position Notes, International Monetary Fund 2009/29, International Monetary Fund.
  22. repec:fip:fedgsq:y:2007:i:sep11 is not listed on IDEAS
  23. King, Robert G. & Levine, Ross, 1993. "Finance, entrepreneurship and growth: Theory and evidence," Journal of Monetary Economics, Elsevier, Elsevier, vol. 32(3), pages 513-542, December.
  24. Hanan Morsy, 2010. "Current Account Determinants For Oil-Exporting Countries," Working Papers, Economic Research Forum 511, Economic Research Forum, revised Mar 2010.
  25. Andres Gonzalez & Timo Terasvirta & Dick van Dijk, 2005. "Panel Smooth Transition Regression Models," Research Paper Series, Quantitative Finance Research Centre, University of Technology, Sydney 165, Quantitative Finance Research Centre, University of Technology, Sydney.
  26. Thorvaldur Gylfason & Gylfi Zoega, 2004. "Natural Resources and Economic Growth: The Role of Investment," DEGIT Conference Papers, DEGIT, Dynamics, Economic Growth, and International Trade c009_011, DEGIT, Dynamics, Economic Growth, and International Trade.
  27. Menzie D. Chinn & Hiro Ito, 2005. "Current Account Balances, Financial Development and Institutions: Assaying the World "Savings Glut"," NBER Working Papers 11761, National Bureau of Economic Research, Inc.
  28. Cihak, Martin & Demirguc-Kunt, Asli & Feyen, Erik & Levine, Ross, 2013. "Financial Development in 205 Economies, 1960 to 2010," Journal of Financial Perspectives, EY Global FS Institute, EY Global FS Institute, vol. 1(2), pages 17-36.
  29. Christopoulos, Dimitris K. & Tsionas, Efthymios G., 2004. "Financial development and economic growth: evidence from panel unit root and cointegration tests," Journal of Development Economics, Elsevier, Elsevier, vol. 73(1), pages 55-74, February.
  30. Juliana Dutra Araujo & Grace Bin Li & Marcos Poplawski-Ribeiro & Luis-Felipe Zanna, 2013. "Current Account Norms in Natural Resource Rich and Capital Scarce Economies," IMF Working Papers, International Monetary Fund 13/80, International Monetary Fund.
  31. Matthew Higgins & Thomas Klitgaard & Robert Lerman, 2006. "Recycling petrodollars," Current Issues in Economics and Finance, Federal Reserve Bank of New York, Federal Reserve Bank of New York, vol. 12(Dec).
  32. Fuad Hasanov & Rabah Arezki, 2009. "Global Imbalances and Petrodollars," IMF Working Papers, International Monetary Fund 09/89, International Monetary Fund.
  33. Reda Cherif & Fuad Hasanov, 2012. "Oil Exporters' Dilemma," IMF Working Papers, International Monetary Fund 12/4, International Monetary Fund.
  34. Basher, Syed Abul & Fachin, Stefano, 2011. "The long-run relationship between savings and investment in oil-exporting developing countries: A case study of the Gulf Arab States," MPRA Paper 29077, University Library of Munich, Germany.
  35. Gruber, Joseph W. & Kamin, Steven B., 2007. "Explaining the global pattern of current account imbalances," Journal of International Money and Finance, Elsevier, Elsevier, vol. 26(4), pages 500-522, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Blaise Gnimassoun, 2014. "The importance of the exchange rate regime in limiting current account imbalances in sub-Saharan African countries," EconomiX Working Papers, University of Paris West - Nanterre la Défense, EconomiX 2014-22, University of Paris West - Nanterre la Défense, EconomiX.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:drm:wpaper:2013-29. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valérie Mignon).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.