Fiscal Policy in Oil and Gas-Exporting Economies: Good Times, Bad Times and Ugly Times

  • Program -
  • Type Discussion paper
  • Date 04 July 2023
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Abstract

Revenues from oil and gas exports represent an important source of government budgets in some emerging countries. At the same time, these revenues fluctuate considerably due to changing global economic conditions and energy prices. Economic theory prescribes that governments should try to stabilize their economies by saving windfall oil and gas revenues and spending them in periods of price downturns. However, oil- and gas-exporting countries often run procyclical policies, that is, they increase spending during windfall periods and reduce it in the event of a shortfall, which may result in severe recessions. Understanding what drives the response of fiscal policy to oil and gas revenue shocks is important as it helps to explain what makes the economies of commodity exporters more or less vulnerable to commodity price shocks, and how they can adjust to price volatility and to the long-term energy transition.

Authors

Olivier Durand-Lasserve

Olivier Durand-Lasserve

Executive Director- Energy Macro & Microeconomics Olivier is a executive director in the Energy Systems and Macroeconomics program. Previously, he was an economist at the Organisation…

Olivier is a executive director in the Energy Systems and Macroeconomics program. Previously, he was an economist at the Organisation for Economic Co-operation and Development (OECD) and at the International Energy Agency (IEA) in Paris where his activities covered macroeconomic policy analysis and applied general equilibrium modeling. He contributed to various modeling studies on the assessment of the macroeconomic, environmental and distributional consequences of energy and environmental policies. He also worked on the land-water-energy nexus and on the economic consequences of air pollution. Before he joined the OECD, Olivier worked at ENGIE, in Paris, where he developed an in-house modeling framework for quantifying global long-term energy-economy scenarios. While completing his Ph.D., he was a research assistant at the Center for Operations Research and Econometrics (CORE) in Louvain-la-Neuve, Belgium.

Expertise

  • Macroeconomic consquences of energy policies

Publications See all Olivier Durand-Lasserve’s publications

Fatih Karanfil

Fatih Karanfil

Principal Fellow- Energy Macro & Microeconomics Fatih is an economist who is interested in energy and environment. Before joining KAPSARC in December 2017, he was an…

Fatih is an economist who is interested in energy and environment. Before joining KAPSARC in December 2017, he was an Associate Professor of Economics at the University of Paris Nanterre and was a Fellow at EconomiX-CNRS in France. During this period, he conducted research, taught courses in energy economics, environmental economics, and econometrics, and contributed to projects funded by organizations such as the European Renewable Energy Council, the French Energy Council, and Région Île-de-France.

Fatih’s work at KAPSARC mainly focuses on developing economic frameworks to provide insights into energy and economic policymaking in oil-producing countries, particularly Saudi Arabia. His research appears in leading journals in energy economics as well as general-interest economics journals.

He received his Ph.D. in Economics from the University of Paris 1 Panthéon-Sorbonne in 2008. Prior to that, he completed an M.A. in Economic Analysis and Modeling jointly offered by the University of Paris 1 Panthéon-Sorbonne and École Centrale Paris. Fatih also holds an HDR degree, which is a French accreditation to supervise doctoral research.

Expertise

  • Energy Economics
  • Environmental Economics
  • Applied Economics

Publications See all Fatih Karanfil’s publications

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