Oil Exporters' Dilemma [electronic resource] : How Much to Save and How Much to Invest, Cherif, Reda..
- Washington, D.C. : International Monetary Fund, 2004.
- IMF eLibrary
IMF Working Papers; Working Paper No. 12/4.
IMF Working Papers; Working Paper No. 12/4
- Government document
1 online resource (22 p.)
- Local subjects:
- Financial Markets. (search)
Financial Markets and the Macroeconomy. (search)
Financial sector. (search)
Oil exporting countries. (search)
Oil revenues. (search)
Public investment. (search)
Resource allocation. (search)
Saving and Capital Investment. (search)
Asia including Middle East. (search)
- Policymakers in oil-exporting countries confront the question of how to allocate oil revenues among consumption, saving, and investment in the face of high income volatility. We study this allocation problem in a precautionary saving and investment model under uncertainty. Consistent with data in the 2000s, precautionary saving is sizable and the marginal propensity to consume out of permanent shocks is below one, in stark contrast to the predictions of the perfect foresight model. The optimal investment rate is high if productivity in the tradable sector is high enough.
- Description based on print version record.
- Cherif, Reda.
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- Print Version:
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- Restricted for use by site license.
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