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Global Imbalances and Petrodollars

Author Info

Listed author(s):
  • 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.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 09/89.

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Length: 25
Date of creation: 01 Apr 2009
Handle: RePEc:imf:imfwpa:09/89
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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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  1. Chinn, Menzie D. & Prasad, Eswar S., 2003. "Medium-term determinants of current accounts in industrial and developing countries: an empirical exploration," Journal of International Economics, Elsevier, vol. 59(1), pages 47-76, January.
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  11. Andreas Billmeier & Dalia S Hakura, 2008. "Trade Elasticities in the Middle East and Central Asia; What is the Role of Oil?," IMF Working Papers 08/216, International Monetary Fund.
  12. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
  13. Giancarlo Corsetti & Gernot J. Müller, 2006. "Twin deficits: squaring theory, evidence and common sense," Economic Policy, CEPR;CES;MSH, vol. 21(48), pages 597-638, October.
  14. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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Cited by:

  1. Blaise Gnimassoun & Marc Joets & Tovonony Razafindrabe, 2016. "On the link between current account and oil price fluctuation in diversified economies: The case of Canada," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2016-08, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  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. 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.
  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. 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.
  6. Enrique Moral-Benito & Oliver Roehn, 2014. "The impact of financial (de)regulation on current account balances," Working Papers 1424, Banco de España;Working Papers Homepage.
  7. Paul Cashin & Samya Beidas-Strom, 2011. "Are Middle Eastern Current Account Imbalances Excessive?," IMF Working Papers 11/195, International Monetary Fund.
  8. Blaise Gnimassoun, 2015. "Exchange rate misalignments and the external balance under a pegged currency system," EconomiX Working Papers 2015-9, University of Paris West - Nanterre la Defense, EconomiX.
  9. International Monetary Fund, 2011. "Kuwait; Selected Issues," IMF Staff Country Reports 11/218, 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. 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 –.
  12. Alberto Behar & Armand Fouejieu, 2016. "External Adjustment in Oil Exporters; The Role of Fiscal Policy and the Exchange Rate," IMF Working Papers 16/107, International Monetary Fund.

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