IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/13-79.html
   My bibliography  Save this paper

The Day After Tomorrow; Designing an Optimal Fiscal Strategy for Libya

Author

Listed:
  • Carlos Caceres
  • Serhan Cevik
  • Marco Committeri
  • Borja Gracia

Abstract

Libya is highly dependent on exhaustible and volatile hydrocarbon resources, which constitute the bulk of government revenues. Although resource wealth provides the means to promote socio-economic development, procyclical fiscal policies threaten macroeconomic stability as well as fiscal sustainability and intergenerational equity. In three parts, this paper provides an assessment of the cyclically adjusted fiscal stance, analyzes fiscal sustainability according the permanent income framework, and simulates various fiscal policy rules with the objective of developing a rule-based fiscal strategy that would delink the economy from oil price fluctuations, improve the management of resource wealth, and safeguard macroeconomic stability.

Suggested Citation

  • Carlos Caceres & Serhan Cevik & Marco Committeri & Borja Gracia, 2013. "The Day After Tomorrow; Designing an Optimal Fiscal Strategy for Libya," IMF Working Papers 13/79, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:13/79
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=40431
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nina T Budina & Tidiane Kinda & Andrea Schaechter & Anke Weber, 2012. "Fiscal Rules at a Glance; Country Details from a New Dataset," IMF Working Papers 12/273, International Monetary Fund.
    2. Graciela L. Kaminsky & Carmen M. Reinhart & Carlos A. Végh, 2005. "When It Rains, It Pours: Procyclical Capital Flows and Macroeconomic Policies," NBER Chapters,in: NBER Macroeconomics Annual 2004, Volume 19, pages 11-82 National Bureau of Economic Research, Inc.
    3. Andrew Berg & Rafael Portillo & Shu-Chun S Yang & Luis-Felipe Zanna, 2013. "Public Investment in Resource-Abundant Developing Countries," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(1), pages 92-129, April.
    4. Oya Celasun & Xavier Debrun & Jonathan D. Ostry, 2006. "Primary Surplus Behavior and Risks to Fiscal Sustainability in Emerging Market Countries: A "Fan-Chart" Approach," IMF Staff Papers, Palgrave Macmillan, vol. 53(3), pages 1-3.
    5. Cherif, Reda & Hasanov, Fuad, 2013. "Oil Exporters’ Dilemma: How Much to Save and How Much to Invest," World Development, Elsevier, vol. 52(C), pages 120-131.
    6. Arturo Galindo & Carlos Scartascini & J. Mark Payne & Robert Daughters & Alberto Melo & Koldo Echebarría & Eduardo Lora & Gabriel Filc & Alejandro Micco & Alberto E. Chong & Ugo Panizza & Juan Benavid, 2007. "The State of State Reform in Latin America," IDB Publications (Books), Inter-American Development Bank, number 352 edited by Eduardo Lora, October.
    7. Serhan Cevik, 2011. "Policy Coordination in Fiscal Federalism; Drawing Lessons From the Dubai Debt Crisis," IMF Working Papers 11/147, International Monetary Fund.
    8. Teresa Ter-Minassian, 2007. "Fiscal Rules for Subnational Governments: Can They Promote Fiscal Discipline?," OECD Journal on Budgeting, OECD Publishing, vol. 6(3), pages 1-11.
    9. Xavier Debrun, 2011. "Democratic Accountability, Deficit Bias, and Independent Fiscal Agencies," IMF Working Papers 11/173, International Monetary Fund.
    10. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
    11. Rogoff, Kenneth, 1990. "Equilibrium Political Budget Cycles," American Economic Review, American Economic Association, vol. 80(1), pages 21-36, March.
    12. Bems, Rudolfs & de Carvalho Filho, Irineu, 2011. "The current account and precautionary savings for exporters of exhaustible resources," Journal of International Economics, Elsevier, vol. 84(1), pages 48-64, May.
    13. Arturo Galindo & Carlos Scartascini & J. Mark Payne & Robert Daughters & Alberto Melo & Koldo Echebarría & Eduardo Lora & Gabriel Filc & Alejandro Micco & Alberto E. Chong & Ugo Panizza & Juan Benavid, 2007. "The State of State Reform in Latin America," IDB Publications (Books), Inter-American Development Bank, number 59578 edited by Eduardo Lora, February.
    14. Steven A Barnett & Rolando Ossowski, 2002. "Operational Aspects of Fiscal Policy in Oil-Producing Countries," IMF Working Papers 02/177, International Monetary Fund.
    15. Xavier Debrun & Manmohan S. Kumar, 2007. "The Discipline-Enhancing Role of Fiscal Institutions; Theory and Empirical Evidence," IMF Working Papers 07/171, International Monetary Fund.
    16. Marcos Poplawski-Ribeiro & Mauricio Villafuerte & Thomas Baunsgaard & Christine J. Richmond, 2012. "Fiscal Frameworks for Resource Rich Developing Countries," IMF Staff Discussion Notes 12/04, International Monetary Fund.
    17. repec:idb:brikps:59578 is not listed on IDEAS
    18. Paulo A Medas & Daria V Zakharova, 2009. "A Primeron Fiscal Analysis in Oil-Producing Countries," IMF Working Papers 09/56, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Serhan Cevik & Katerina Teksoz, 2014. "Hitchhiker's guide to inflation in Libya," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 7(1), pages 1-21.
    2. Al-Darwish, Ahmed & Cevik, Serhan & Chami, Ralph & Charap, Joshua & George, Susan & Gracia, Borja & Gray, Simon & Pattanayak, Sailendra, 2012. "Libya beyond the Revolution: Challenges and Opportunities," MPRA Paper 82683, University Library of Munich, Germany.
    3. World Bank Group, 2015. "Toward Solutions for Youth Employment," World Bank Other Operational Studies 23261, The World Bank.

    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:13/79. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi). General contact details of provider: http://edirc.repec.org/data/imfffus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.