Please use this identifier to cite or link to this item: https://doi.org/10.1177/1091142116681838
Title: The Effect of Oil Revenue Funds on Social Welfare
Authors: DINA AZHGALIYEVA 
Keywords: sovereign wealth funds
fiscal rules
public finance
oil price
Issue Date: 18-Dec-2016
Publisher: SAGE journals
Citation: DINA AZHGALIYEVA (2016-12-18). The Effect of Oil Revenue Funds on Social Welfare. Public Finance Review 46 (4) : 692-712. ScholarBank@NUS Repository. https://doi.org/10.1177/1091142116681838
Abstract: Recently, it has become popular among oil-producing countries to establish oil revenue funds, which are believed to stabilize the economy and provide intergenerational redistribution. Oil revenue funds differ depending on rules, such as accumulation rules and withdrawal rules. Numerical simulations show that funds can improve intergenerational social welfare, though not always. Which rule yields the highest intergenerational social welfare depends on countries’ parameters such as gross interest rate, relative risk aversion, and growth rate of oil production. Some rules may be unaffordable for a government budget. If oil production does not decline, funds following expenditure-based accumulation rules yield higher social welfare than funds that follow other rules. If oil production declines, the permanent oil income model or “Bird-in-Hand” can yield the highest social welfare.
Source Title: Public Finance Review
URI: http://scholarbank.nus.edu.sg/handle/10635/151198
ISSN: 10911421
DOI: 10.1177/1091142116681838
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