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ABSTRACT
Oil exporters have run large current account surpluses. We explore oil exporters’ role in the global imbalances debate. Current account dynamics are estimated for oil-exporting countries and the rest of the world. We find that fiscal policy has a much stronger effect on the current account of oil exporters than on current accounts of other countries. The current account adjustment of oil-exporting countries is also faster. Fiscal policy of oil exporters can have a significant and speedy impact on global imbalances. The impact via the adjustment of exchange rates might not be effective.
Commentary
Global Imbalances and Petrodollars
Rabah Arezki and
Rabah Arezki
Chief Economist and Vice President, Economic Governance and Knowledge Management
- African Development Bank,
Former Brookings Expert
@rabah_arezki
Fuad Hasanov
FH
Fuad Hasanov
December 22, 2012