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Current Account Determinants for Oil-Exporting Countries

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  • Hanan Morsy

Abstract

The paper aims at characterizing the main determinants of the medium-term current account balance for oil-exporting countries using dynamic panel estimation techniques. Previous studies included a very limited number of oil-exporting countries in their samples, raising concerns about the applicability of the estimated coefficients for oil countries. Furthermore, current approaches are not specifically tailored to oil-producing countries because they fail to capture the effects of oil wealth and the degree of maturity in oil production. This paper explores the underlying determinants of the current account balance for a large sample of oilexporting countries, and extends the specifications commonly used in the literature to include an oil wealth variable, as well as a proxy for the degree of maturity in oil production. The paper therefore contributes to the existing literature both in terms of the sample studied as well as the variables considered. The results reveal that factors that matter in determining the equilibrium current account balance of oil-exporting counties are the fiscal balance, the oil balance, oil wealth, age dependency, and the degree of maturity in oil production.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/28.

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Length: 15
Date of creation: 01 Feb 2009
Date of revision:
Handle: RePEc:imf:imfwpa:09/28

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Keywords: Current account balances; Oil exporting countries; Oil production; Oil revenues; Economic growth; Economic models; current account; current account balance; current account deficits; current account deficit; current accounts; current account position; current account surpluses; budget balance; domestic currency; current account positions;

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Cited by:
  1. Danica Unevska Andonova & Branimir Jovanovic, 2011. "Sustainability of the Macedonian Current Account," Working Papers, National Bank of the Republic of Macedonia 2011-06, National Bank of the Republic of Macedonia.
  2. Philipp an de Meulen, 2011. "Labor Heterogeneity and the Risk of Expropriation in Less Developed Countries," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0298, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  3. Paul Cashin & Samya Beidas-Strom, 2011. "Are Middle Eastern Current Account Imbalances Excessive?," IMF Working Papers 11/195, International Monetary Fund.
  4. Jean-Pierre Allegret & Cécile Couharde & Dramane Coulibaly & Valérie Mignon, 2013. "Current Accounts and Oil Price Fluctuations in Oil-Exporting Countries: the Role of Financial Development," Working Papers 2013-19, CEPII research center.
  5. Harms, Philipp & an de Meulen, Philipp, 2013. "Demographic structure and the security of property rights: The role of development and democracy," European Journal of Political Economy, Elsevier, Elsevier, vol. 29(C), pages 73-89.
  6. Robert C. York & Misa Takebe, 2011. "External Sustainability of Oil-Producing Sub-Saharan African Countries," IMF Working Papers 11/207, International Monetary Fund.
  7. Irineu E. Carvalho Filho & Rudolfs Bems, 2009. "Exchange Rate Assessments," IMF Working Papers 09/281, International Monetary Fund.
  8. Natalya Ketenci, 2010. "Major Determinants of Current Account in Russia," Transition Studies Review, Springer, Springer, vol. 17(4), pages 790-806, December.
  9. Philipp Harms & Pierre-Guillaume Méon, 2011. "An FDI is an FDI is an FDI? The growth effects of greenfield investment and mergers and acquisitions in developing countries," Working Papers 11.10, Swiss National Bank, Study Center Gerzensee.
  10. Syed Jawaid & Syed Raza, 2013. "Dynamics of Current Account Deficit: A Lesson from Pakistan," Transition Studies Review, Springer, Springer, vol. 19(3), pages 357-366, February.
  11. Rigoberto Ariel Yépez-García & Luis San Vicente Portes & Luis Enrique García, 2013. "Planning for Higher Oil Prices : Power Sector Impact in Latin America and the Caribbean," World Bank Other Operational Studies 17547, The World Bank.
  12. Klaus Schmidt-Hebbel, 2012. "Fiscal Institutions in Resource-Rich Economies: Lessons from Chile and Norway," Documentos de Trabajo, Instituto de Economia. Pontificia Universidad Católica de Chile. 416, Instituto de Economia. Pontificia Universidad Católica de Chile..

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