Loading...

Oil Stabilization Fund, Inflation and Economic Volatility

Moradi, Amir Mohsen | 2019

44 Viewed
  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 58773 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Madanizadeh, Ali
  7. Abstract:
  8. Macroeconomic fluctuations have a serious impact on household welfare. In natural resource exporting countries - and in particular oil countries - the main source of macroeconomic fluctuations is oil revenue fluctuations, and as a result, preventing oil revenue fluctuations from decreasing has an important role in reducing macroeconomic fluctuations and household welfare. One of the ways in which oil revenue fluctuations enter the economy is through the budget. The lack of a proper fiscal rule in spending natural resource revenues in the budget has a great impact on economic instability. In this study, the current situation, which is in the form of a percentage division of oil revenues between the budget and the National Development Fund, is compared with a situation where a fiscal rule is based on stabilizing the budget's share of oil revenues under a stochastic dynamic general equilibrium model with a neo-Keynesian approach. Next, the appropriate response of monetary and exchange rate policy in the presence of a fiscal rule is examined. The results show that the existence of a stabilizing fiscal rule plays an important role in reducing fluctuations and improving household welfare. So that by creating an oil shock, in the absence of a fiscal rule, inflation will decrease by 0.014, and by creating a stabilizing fiscal rule, inflation will increase by 0.0035 points. As for consumption, in the current situation, consumption will experience a decrease of 0.6 points and an increase of 0.3 points in the presence of a fiscal rule
  9. Keywords:
  10. Fiscal Policies ; Monetary Policy ; Fiscal Rule ; Natural Resource Based Economic ; Oil Price Shocks ; Oil Income ; Stochastic Dynamic General Equilibrium Model ; Natural Resource Exporting Economy

 Digital Object List

 Bookmark

No TOC