AbstractThis paper examines whether there is a case for temporary but persistent fiscal surpluses in economies heavily endowed with nonrenewable resources. It finds that there generally is a case. Fiscal surpluses permit replacing nonfinancial wealth with financial assets, the return on which increases public consumption possibilities of future generations for a constant across-generation tax burden. The more biased are a government’s preferences toward present generations, the lower will be the initial surpluses; the larger the finite endowment, the larger the initial surpluses. In a more general framework, including public investment, the proposition could be rephrased by replacing surpluses with stronger initial fiscal positions.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 99/44.
Date of creation: 01 Mar 1999
Date of revision:
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Postal: International Monetary Fund, Washington, DC USA
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- World Bank, 2003. "Azerbaijan : Public Expenditure Review," World Bank Other Operational Studies 13825, The World Bank.
- Thomas Baunsgaard, 2003. "Fiscal Policy in Nigeria," IMF Working Papers 03/155, International Monetary Fund.
- Joseph Ntamatungiro, 2004. "Fiscal Sustainability in Heavily Indebted Countries Dependenton Nonrenewable Resources," IMF Working Papers 04/30, International Monetary Fund.
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