The Macroeconomic Results of Diligent Resource Revenues Management: The Norwegian Case

Many commodity-exporting countries saw their revenues plummet and experienced fiscal deficits during the pandemic. The economic rebound will restore resource exports/revenues and a new round of debate will be initiated on revenues utilization. Countries will decide either to internalize revenues or capitalize them with investments abroad. Our autoregressive distributed lag (ARDL) models provide evidence of the benefits Norway enjoys since it has not internalized revenues. The currency rate, long-term bond yields, and GDP growth are insulated from prices volatility. Furthermore, the country can... Mehr ...

Verfasser: Theodosios Anastasios Perifanis
Dokumenttyp: Text
Erscheinungsdatum: 2022
Verlag/Hrsg.: Multidisciplinary Digital Publishing Institute
Schlagwörter: resources / revenue management / resource management / Norway / Dutch disease / resource curse / macroeconomic effects / mitigation policies / oil / hydrocarbons
Sprache: Englisch
Permalink: https://search.fid-benelux.de/Record/base-28996367
Datenquelle: BASE; Originalkatalog
Powered By: BASE
Link(s) : https://doi.org/10.3390/en15041429

Many commodity-exporting countries saw their revenues plummet and experienced fiscal deficits during the pandemic. The economic rebound will restore resource exports/revenues and a new round of debate will be initiated on revenues utilization. Countries will decide either to internalize revenues or capitalize them with investments abroad. Our autoregressive distributed lag (ARDL) models provide evidence of the benefits Norway enjoys since it has not internalized revenues. The currency rate, long-term bond yields, and GDP growth are insulated from prices volatility. Furthermore, the country can absorb currency appreciations/devaluations and long-term credit rate hikes through government expenditure. However, monetary steering is favored in the long term (absorbs yield increases), while in the short run it can allow for speculative activities by credit investors. Countries should not internalize resource revenues to avoid experiencing decreased competitiveness and economic growth and increased credit rates. However, the temptation will be high enough since deficits and support packages cost a lot. This study also includes years of low prices. Thus, our research reveals the extent and limitations of diligent revenue management from a country considered as a role model.