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Oil prices and fiscal policy in an oil-exporter country: empirical evidence from Oman

Citation

Al Jabri, S and Raghavan, M and Vespignani, J, Oil prices and fiscal policy in an oil-exporter country: empirical evidence from Oman, Energy Economics:, 111 pp. 1-18. ISSN 0140-9883 (2022) [Refereed Article]


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DOI: doi:10.1016/j.eneco.2022.106103

Abstract

This paper studies the impact of oil price shocks on fiscal policy and real GDP in Oman using new unexplored data. We find that an oil price shock explains around 22% and 46% of the government revenue and GDP variation, respectively. Decomposing the government revenue and GDP further into petroleum and non-petroleum related components, we find that an oil price shock explains around 26% of the variation in petroleum revenue and 90% of the petroleum-GDP. Though petroleum and non-petroleum GDP respond positively to oil price shocks, government expenditure is not directly affected by oil prices but is affected by government revenue. The results suggest that the Omani government uses its reserve fund and local and international debt to smooth and reduce the impact of oil price fluctuations.

Item Details

Item Type:Refereed Article
Keywords:oil price shocks, fiscal policy, GDP, SVAR
Research Division:Economics
Research Group:Applied economics
Research Field:Behavioural economics
Objective Division:Economic Framework
Objective Group:Macroeconomics
Objective Field:Balance of payments
UTAS Author:Raghavan, M (Dr Mala Raghavan)
UTAS Author:Vespignani, J (Associate Professor Joaquin Vespignani)
ID Code:150289
Year Published:2022
Deposited By:Finance
Deposited On:2022-06-06
Last Modified:2022-06-20
Downloads:0

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