Editor’s Note: The article was originally published on the Wiley Online Library . A subscription required to access the full article »
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
December 22, 2012