IMF Working Papers

Fiscal Sustainability with Non-Renewable Resources

By Nigel A Chalk

March 1, 1998

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Nigel A Chalk. Fiscal Sustainability with Non-Renewable Resources, (USA: International Monetary Fund, 1998) accessed December 23, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper assesses sustainable fiscal behavior in an economy where wealth is derived predominantly from a non-renewable resource. It explores the issue in a simple dynamic framework that highlights the structural weaknesses in the underlying budgetary position, takes into account the rate of depletion of a country’s natural resource base, and examines the impact of changes in a country’s terms of trade. An alternative indicator of fiscal sustainability is derived, and the principal factors determining sustainability are identified. The results of the analysis are applied to Venezuela and Kuwait.

Subject: Environment, Fiscal policy, Fiscal stance, International trade, National accounts, Natural resources, Personal income, Terms of trade

Keywords: Asset accumulation, Core deficit, Deficit-GDP ratio, Fiscal stance, Fiscal sustainability, Government assets, Natural resource, Natural resources, Net asset position, Non-renewable resource, Oil producers, Personal income, Private sector, Rate of return, Resource constraint, Resource depletion, Resource exploitation, Resource wealth, Terms of trade, WP

Publication Details

  • Pages:

    36

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1998/026

  • Stock No:

    WPIEA0261998

  • ISBN:

    9781451844351

  • ISSN:

    1018-5941

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