This paper deals with the fiscal implications of a stabilization fund that allows for a stable consumption over time, in particular in the case of an oil producing and exporting country like México. We discuss the functioning of an oil stabilization fund based on international experience and the Mexican experience. We present a model of optimal fiscal policy in the context of a country with important revenues generated by an exhaustible resource such as oil.
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Paper provided by Tecnológico de Monterrey, Campus Ciudad de México in its series EGAP Working Papers with number
2008-03.