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Global Imbalances and Petrodollars

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  • Fuad Hasanov
  • Rabah Arezki

Abstract

Oil exporters have run large current account surpluses. We explore oil exporters' role in our understanding and the resolution of global imbalances. Current account dynamics are estimated for oil-exporting countries and the rest of the world. We find that fiscal policy has a much stronger effect on current account of oil exporters than on current account of other countries. The current account adjustment of oil-exporting countries is also faster than that of other countries. We conclude that a change in fiscal policy of oil exporters can have significant and speedy impact on global imbalances.

Suggested Citation

  • Fuad Hasanov & Rabah Arezki, 2009. "Global Imbalances and Petrodollars," IMF Working Papers 09/89, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:09/89
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    Cited by:

    1. Gnimassoun, Blaise & Joëts, Marc & Razafindrabe, Tovonony, 2017. "On the link between current account and oil price fluctuations in diversified economies: The case of Canada," International Economics, Elsevier, vol. 152(C), pages 63-78.
    2. Moral-Benito, Enrique & Roehn, Oliver, 2016. "The impact of financial regulation on current account balances," European Economic Review, Elsevier, vol. 81(C), pages 148-166.
    3. repec:bla:reviec:v:25:y:2017:i:5:p:949-974 is not listed on IDEAS
    4. Allegret, Jean-Pierre & Couharde, Cécile & Coulibaly, Dramane & Mignon, Valérie, 2014. "Current accounts and oil price fluctuations in oil-exporting countries: The role of financial development," Journal of International Money and Finance, Elsevier, vol. 47(C), pages 185-201.
    5. Moral-Benito, Enrique & Roehn, Oliver, 2016. "The impact of financial regulation on current account balances," European Economic Review, Elsevier, vol. 81(C), pages 148-166.
    6. repec:bla:worlde:v:41:y:2018:i:3:p:926-957 is not listed on IDEAS
    7. Blaise Gnimassoun, 2017. "Exchange rate misalignments and the external balance under a pegged currency system," Review of International Economics, Wiley Blackwell, vol. 25(5), pages 949-974, November.
    8. repec:eee:jmacro:v:60:y:2019:i:c:p:212-228 is not listed on IDEAS
    9. Paul Cashin & Samya Beidas-Strom, 2011. "Are Middle Eastern Current Account Imbalances Excessive?," IMF Working Papers 11/195, International Monetary Fund.
    10. Coulibaly, Issiaka & Davis, Junior, 2013. "Exchange rate regimes and economic performance: Does CFA zone membership benefit their economies?," MPRA Paper 54075, University Library of Munich, Germany.
    11. Alberto Behar & Armand Fouejieu, 2018. "External adjustment in oil exporters: The role of fiscal policy and the exchange rate," The World Economy, Wiley Blackwell, vol. 41(3), pages 926-957, March.
    12. repec:ces:ifobei:77 is not listed on IDEAS
    13. Ibrahim Turhan & Erk Hacihasanoglu & Ugur Soytas, 2013. "Oil Prices and Emerging Market Exchange Rates," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 49(S1), pages 21-36, January.
    14. Olusegun Akanbi, 2015. "Fiscal policy and current account in an oil-rich economy: the case of Nigeria," Empirical Economics, Springer, vol. 48(4), pages 1563-1585, June.
    15. Boubakri, Salem & Guillaumin, Cyriac & Silanine, Alexandre, 2019. "Non-linear relationship between real commodity price volatility and real effective exchange rate: The case of commodity-exporting countries," Journal of Macroeconomics, Elsevier, vol. 60(C), pages 212-228.
    16. International Monetary Fund, 2011. "Kuwait; Selected Issues," IMF Staff Country Reports 11/218, International Monetary Fund.
    17. Emir Zildžović, 2015. "The Sustainability Of Serbia`S External Position: The Impact Of Fiscal Adjustment And External Shocks," Economic Annals, Faculty of Economics, University of Belgrade, vol. 60(204), pages 31-60, January –.

    More about this item

    Keywords

    Current account surpluses; Current account; Global imbalances; Fiscal policy; Oil prices; Oil exporting countries; Oil revenues; Payments imbalances; Oil exporters; exporters; exporting countries; oil-exporting countries; terms of trade;

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