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Commodity Booms and Government Expenditure Responses


  • Sanjeev Gupta
  • Kenneth M. Miranda


This paper develops a model incorporating asymmetric government expenditure behavior in response to a windfall revenue gain occasioned by a transitory commodity boom. The model is used to illustrate the transitional dynamics of a stylized economy during the boom period and the nature of the macroeconomic disequilibria which emerge in the post-boom period. Country case studies of Sri Lanka, Malaysia, and Kenya support the model’s predictions and the protracted nature of adjustment following the waning of the boom.

Suggested Citation

  • Sanjeev Gupta & Kenneth M. Miranda, 1991. "Commodity Booms and Government Expenditure Responses," IMF Working Papers 91/44, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:91/44

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    References listed on IDEAS

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    Cited by:

    1. Sven Wunder, 1992. "La enfermedad holandesa y el caso colombiano," COYUNTURA ECONÓMICA, FEDESARROLLO, vol. 22(1), pages 167-190, April.
    2. Schuknecht, Ludger, 1999. "Tying Governments' Hands in Commodity Taxation," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 8(2), pages 152-181, July.
    3. Asfaha, Samuel, 2007. "National Revenue Funds: Their Efficacy for Fiscal Stability and Intergenerational Equity," MPRA Paper 7656, University Library of Munich, Germany.


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