Commodity Booms and Government Expenditure Responses
Summary:
This paper develops a model incorporating asymmetric government expenditure behavior in response to a windfall revenue gain occasioned by a transitory commodity boom. The model is used to illustrate the transitional dynamics of a stylized economy during the boom period and the nature of the macroeconomic disequilibria which emerge in the post-boom period. Country case studies of Sri Lanka, Malaysia, and Kenya support the model’s predictions and the protracted nature of adjustment following the waning of the boom.
Series:
Working Paper No. 1991/044
Subject:
Commodities Commodity booms Expenditure Exports Foreign exchange International trade Real exchange rates Trade balance
Notes:
Includes country experiences for Kenya, Malaysia and Sri Lank.
English
Publication Date:
May 1, 1991
ISBN/ISSN:
9781451846362/1018-5941
Stock No:
WPIEA0441991
Pages:
44
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