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Trinidad and tobago; The Energy Boom and Proposals for a Sustainable Fiscal Policy

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  • International Monetary Fund

Abstract

Trinidad and Tobago is experiencing an energy boom stronger than the ones in 1970s and 1980s. The main fiscal policy challenge is to ensure that the increased revenues from the ultimately exhaustible resources are used in a way that protects the competitiveness of the nonenergy sector, builds assets to ensure intergenerational equity, and provides a cushion for stabilization. This paper derives estimates of a sustainable level of primary fiscal balance using Friedman's permanent income hypothesis. These estimates can be used as a guide for the formulation of medium- and long-term fiscal policy frameworks.

Suggested Citation

  • International Monetary Fund, 2005. "Trinidad and tobago; The Energy Boom and Proposals for a Sustainable Fiscal Policy," IMF Working Papers 05/197, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:05/197
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    References listed on IDEAS

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    1. International Monetary Fund, 1995. "Trinidad and Tobago; Economic Developments and Selected Background Issues," IMF Staff Country Reports 95/16, International Monetary Fund.
    2. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
    3. Rodrigo O. Valdes & Eduardo M Engel, 2000. "Optimal Fiscal Strategy for Oil Exporting Countries," IMF Working Papers 00/118, International Monetary Fund.
    4. Solow, Robert M, 1986. " On the Intergenerational Allocation of Natural Resources," Scandinavian Journal of Economics, Wiley Blackwell, vol. 88(1), pages 141-149.
    5. International Monetary Fund, 2002. "Republic of Kazakhstan; Selected Issues and Statistical Appendix," IMF Staff Country Reports 02/64, International Monetary Fund.
    6. Marijn Verhoeven & Sanjeev Gupta & Erwin H Tiongson, 1999. "Does Higher Government Spending Buy Better Results in Education and Health Care?," IMF Working Papers 99/21, International Monetary Fund.
    7. International Monetary Fund, 2003. "Trinidad and Tobago; Selected Issues and Statistical Appendix," IMF Staff Country Reports 03/233, International Monetary Fund.
    8. Sheila Bassett & Claire Liuksila & Alejandro García, 1994. "Fiscal Policy Sustainability in Oil-Producing Countries," IMF Working Papers 94/137, International Monetary Fund.
    9. Nigel A Chalk, 1998. "Fiscal Sustainability with Non-Renewable Resources," IMF Working Papers 98/26, International Monetary Fund.
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    Citations

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    Cited by:

    1. Lorde, Troy & Jackman, Mahalia & Thomas, Chrystol, 2009. "The macroeconomic effects of oil price fluctuations on a small open oil-producing country: The case of Trinidad and Tobago," Energy Policy, Elsevier, vol. 37(7), pages 2708-2716, July.
    2. International Monetary Fund, 2007. "Bolivia; Selected Issues," IMF Staff Country Reports 07/249, International Monetary Fund.
    3. Alonso A Segura Vasi, 2006. "Management of Oil Wealth Under the Permanent Income Hypothesis; The Case of São Tomé and Príncipe," IMF Working Papers 06/183, International Monetary Fund.
    4. Keyra Primus, 2016. "Fiscal Rules for Resource Windfall Allocation; The Case of Trinidad and Tobago," IMF Working Papers 16/188, International Monetary Fund.
    5. Jean-Luc Hélis & Teresa Daban Sanchez, 2010. "A Public Financial Management Framework for Resources-Producing Countries," IMF Working Papers 10/72, International Monetary Fund.

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