Show simple item record

Oil Windfalls, Fiscal Policy and Money Market Disequilibrium

dc.contributor.authorHuseynov, Salman
dc.contributor.authorAhmadov, Vugar
dc.date.accessioned2016-08-30T19:50:24Z
dc.date.available2016-08-30T19:50:24Z
dc.date.issued2013-06-01
dc.identifier.otherRePEc:wdi:papers:2013-1051
dc.identifier.urihttps://hdl.handle.net/2027.42/133070
dc.description.abstractIn this paper, we base our policy analyses and simulations on three different specifications of a DSGE model developed for a CIS oil rich country and check the impact of the oil windfalls. The first proposed specification is a classical one with a Taylor rule and the second one is a recently new specification with a money growth rule. Beside two familiar specifications, we propose a new specification which assumes a temporary money market disequilibrium in the short run. This disequilibrium is a result of the fiscal misbalance and (non-primary) pro-deficit policy pursued by the fiscal authority. We show that all three specifications allow the fiscal authority to act as the main actor in propagating and amplifying the effects of the oil price shocks to the rest of the economy. When an oil shock hits the economy, its first round effect operates through oil fund transfers to the budget. The second round effects result from an increase in government consumption and government investment expenditures, which augments public capital affecting total factor productivity (TFP) and production, as well as the aggregate demand. We also find that despite significant differences, all three specifications demonstrate similar response dynamics.
dc.relation.ispartofserieswp1051
dc.subjectFiscal Policy
dc.subjectOil Windfalls
dc.subjectPublic investment
dc.subjectMarket Disequilibrium
dc.subjectOil rich country
dc.subject.otherE35
dc.subject.otherE47
dc.subject.otherE58
dc.subject.otherE61
dc.titleOil Windfalls, Fiscal Policy and Money Market Disequilibrium
dc.typeWorking Paper
dc.subject.hlbsecondlevelEconomics
dc.subject.hlbtoplevelBusiness
dc.contributor.affiliationumWilliam Davidson Institute
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/133070/1/wp1051.pdf
dc.contributor.authoremailsalman_huseynov@cbar.az
dc.owningcollnameWilliam Davidson Institute (WDI) - Working Papers


Files in this item

Show simple item record

Remediation of Harmful Language

The University of Michigan Library aims to describe library materials in a way that respects the people and communities who create, use, and are represented in our collections. Report harmful or offensive language in catalog records, finding aids, or elsewhere in our collections anonymously through our metadata feedback form. More information at Remediation of Harmful Language.

Accessibility

If you are unable to use this file in its current format, please select the Contact Us link and we can modify it to make it more accessible to you.