Management of Oil Windfalls in Mexico : Historical Experience and Policy Options for the Future
The macroeconomic impact of commodity windfalls has provided fertile ground for research since the 1970s. Particularly affected are developing countries that rely heavily on commodity exports. in the case of oil windfalls, cross-country experience...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2001/04/1089582/management-oil-windfalls-mexico-historical-experience-policy-options-future http://hdl.handle.net/10986/19677 |
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okr-10986-196772021-04-23T14:03:43Z Management of Oil Windfalls in Mexico : Historical Experience and Policy Options for the Future Everhart, Stephen Duval-Hernandez, Robert ADJUSTMENT POLICIES AGRICULTURE ALLOCATION OF RESOURCES ALTERNATIVE USE BALANCE OF PAYMENTS BARRELS PER DAY BENCHMARK BENCHMARKING BONDS CAPITAL FLIGHT CAPITAL MARKETS CERTAIN EXTENT COMMERCIAL BANKS CONSUMERS CONSUMPTION EXPENDITURES CROWDING OUT CURRENCY APPRECIATION DEBT DEMAND FOR OIL DEVALUATION ECONOMIC GROWTH ELECTRICITY EMPLOYMENT EXCHANGE RATE EXCHANGE RATES EXPENDITURES EXPLOITATION EXPORTS EXTRACTION FISCAL POLICIES FORECASTS GASOLINE GDP GROWTH RATE HYDROCARBON SECTOR HYDROCARBONS IMPORTS INCOME INDUSTRIALIZATION INFLATION INFLATION RATE INTEREST RATE INTERMEDIATE GOODS MACROECONOMIC CONDITIONS MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MONETARY POLICY NATIONAL INCOME NATURAL GAS NATURAL GAS INDUSTRY OIL OIL EXPORTS OIL INDUSTRY OIL INFRASTRUCTURE OIL MARKET OIL PRICE OIL PRICES OIL PRODUCERS OIL PRODUCING OIL PRODUCTION OIL RESERVES OIL REVENUES OIL SECTOR OIL SHOCK OIL SUPPLY OIL] PRICES OPEC OPEC COUNTRIES OPPORTUNITY COST OVERVALUATION PERMANENT INCOME PETROLEUM PETROLEUM RESERVES POLICY MAKERS PRESENT VALUE PRICE INCREASES PRICE LEVELS PRICE OF OIL PRICE PER BARREL PRICE SUBSIDIES PRICE VOLATILITY PRIVATE CONSUMPTION PRODUCERS PRODUCTION CAPACITY PRODUCTIVITY PRODUCTIVITY GROWTH REAL WAGES SAVINGS STRUCTURAL ADJUSTMENT TAX REVENUES TERMS OF TRADE TOTAL CONSUMPTION TRADE DEFICIT TRANSACTIONS COSTS WAGES WEALTH The macroeconomic impact of commodity windfalls has provided fertile ground for research since the 1970s. Particularly affected are developing countries that rely heavily on commodity exports. in the case of oil windfalls, cross-country experience is vast: Indonesia, Kazakhstan, Mexico, Nigeria, the Russian Federation, and Republica Bolivariana de Venezuela have all been buffered by such windfalls. The authors investigate Mexico's experience. They provide an overview of oil's impact on the Mexican economy and of the management of oil rents engineered by the government from the 1970s to date. A third of government revenues come from the hydrocarbon sector--especially oil exports. The reliance of public finance on a single commodity means that shocks threaten the economy's fiscal balance and stability. Policy options for protecting the economy from volatility in oil revenues without eliminating the benefits from rising prices include a stabilization fund and hedging strategies on international markets, which the authors discuss. The stabilization fund smoooths consumption and reduces the costs associated volatile spending. The fund and hedging strategies can complement each other--the fund working as the main recipient of revenues, and the hedging strategies managing short-lived movements in prices. This joint strategy would also reduce the size of the fund and the probability of its going bankrupt. 2014-08-26T15:35:18Z 2014-08-26T15:35:18Z 2001-04 http://documents.worldbank.org/curated/en/2001/04/1089582/management-oil-windfalls-mexico-historical-experience-policy-options-future http://hdl.handle.net/10986/19677 English en_US Policy Research Working Paper;No. 2592 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Mexico |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ADJUSTMENT POLICIES AGRICULTURE ALLOCATION OF RESOURCES ALTERNATIVE USE BALANCE OF PAYMENTS BARRELS PER DAY BENCHMARK BENCHMARKING BONDS CAPITAL FLIGHT CAPITAL MARKETS CERTAIN EXTENT COMMERCIAL BANKS CONSUMERS CONSUMPTION EXPENDITURES CROWDING OUT CURRENCY APPRECIATION DEBT DEMAND FOR OIL DEVALUATION ECONOMIC GROWTH ELECTRICITY EMPLOYMENT EXCHANGE RATE EXCHANGE RATES EXPENDITURES EXPLOITATION EXPORTS EXTRACTION FISCAL POLICIES FORECASTS GASOLINE GDP GROWTH RATE HYDROCARBON SECTOR HYDROCARBONS IMPORTS INCOME INDUSTRIALIZATION INFLATION INFLATION RATE INTEREST RATE INTERMEDIATE GOODS MACROECONOMIC CONDITIONS MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MONETARY POLICY NATIONAL INCOME NATURAL GAS NATURAL GAS INDUSTRY OIL OIL EXPORTS OIL INDUSTRY OIL INFRASTRUCTURE OIL MARKET OIL PRICE OIL PRICES OIL PRODUCERS OIL PRODUCING OIL PRODUCTION OIL RESERVES OIL REVENUES OIL SECTOR OIL SHOCK OIL SUPPLY OIL] PRICES OPEC OPEC COUNTRIES OPPORTUNITY COST OVERVALUATION PERMANENT INCOME PETROLEUM PETROLEUM RESERVES POLICY MAKERS PRESENT VALUE PRICE INCREASES PRICE LEVELS PRICE OF OIL PRICE PER BARREL PRICE SUBSIDIES PRICE VOLATILITY PRIVATE CONSUMPTION PRODUCERS PRODUCTION CAPACITY PRODUCTIVITY PRODUCTIVITY GROWTH REAL WAGES SAVINGS STRUCTURAL ADJUSTMENT TAX REVENUES TERMS OF TRADE TOTAL CONSUMPTION TRADE DEFICIT TRANSACTIONS COSTS WAGES WEALTH |
| spellingShingle |
ADJUSTMENT POLICIES AGRICULTURE ALLOCATION OF RESOURCES ALTERNATIVE USE BALANCE OF PAYMENTS BARRELS PER DAY BENCHMARK BENCHMARKING BONDS CAPITAL FLIGHT CAPITAL MARKETS CERTAIN EXTENT COMMERCIAL BANKS CONSUMERS CONSUMPTION EXPENDITURES CROWDING OUT CURRENCY APPRECIATION DEBT DEMAND FOR OIL DEVALUATION ECONOMIC GROWTH ELECTRICITY EMPLOYMENT EXCHANGE RATE EXCHANGE RATES EXPENDITURES EXPLOITATION EXPORTS EXTRACTION FISCAL POLICIES FORECASTS GASOLINE GDP GROWTH RATE HYDROCARBON SECTOR HYDROCARBONS IMPORTS INCOME INDUSTRIALIZATION INFLATION INFLATION RATE INTEREST RATE INTERMEDIATE GOODS MACROECONOMIC CONDITIONS MACROECONOMIC MANAGEMENT MACROECONOMIC POLICIES MONETARY POLICY NATIONAL INCOME NATURAL GAS NATURAL GAS INDUSTRY OIL OIL EXPORTS OIL INDUSTRY OIL INFRASTRUCTURE OIL MARKET OIL PRICE OIL PRICES OIL PRODUCERS OIL PRODUCING OIL PRODUCTION OIL RESERVES OIL REVENUES OIL SECTOR OIL SHOCK OIL SUPPLY OIL] PRICES OPEC OPEC COUNTRIES OPPORTUNITY COST OVERVALUATION PERMANENT INCOME PETROLEUM PETROLEUM RESERVES POLICY MAKERS PRESENT VALUE PRICE INCREASES PRICE LEVELS PRICE OF OIL PRICE PER BARREL PRICE SUBSIDIES PRICE VOLATILITY PRIVATE CONSUMPTION PRODUCERS PRODUCTION CAPACITY PRODUCTIVITY PRODUCTIVITY GROWTH REAL WAGES SAVINGS STRUCTURAL ADJUSTMENT TAX REVENUES TERMS OF TRADE TOTAL CONSUMPTION TRADE DEFICIT TRANSACTIONS COSTS WAGES WEALTH Everhart, Stephen Duval-Hernandez, Robert Management of Oil Windfalls in Mexico : Historical Experience and Policy Options for the Future |
| geographic_facet |
Latin America & Caribbean Mexico |
| relation |
Policy Research Working Paper;No. 2592 |
| description |
The macroeconomic impact of commodity
windfalls has provided fertile ground for research since the
1970s. Particularly affected are developing countries that
rely heavily on commodity exports. in the case of oil
windfalls, cross-country experience is vast: Indonesia,
Kazakhstan, Mexico, Nigeria, the Russian Federation, and
Republica Bolivariana de Venezuela have all been buffered by
such windfalls. The authors investigate Mexico's
experience. They provide an overview of oil's impact on
the Mexican economy and of the management of oil rents
engineered by the government from the 1970s to date. A third
of government revenues come from the hydrocarbon
sector--especially oil exports. The reliance of public
finance on a single commodity means that shocks threaten the
economy's fiscal balance and stability. Policy options
for protecting the economy from volatility in oil revenues
without eliminating the benefits from rising prices include
a stabilization fund and hedging strategies on international
markets, which the authors discuss. The stabilization fund
smoooths consumption and reduces the costs associated
volatile spending. The fund and hedging strategies can
complement each other--the fund working as the main
recipient of revenues, and the hedging strategies managing
short-lived movements in prices. This joint strategy would
also reduce the size of the fund and the probability of its
going bankrupt. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Everhart, Stephen Duval-Hernandez, Robert |
| author_facet |
Everhart, Stephen Duval-Hernandez, Robert |
| author_sort |
Everhart, Stephen |
| title |
Management of Oil Windfalls in Mexico : Historical Experience and Policy Options for the Future |
| title_short |
Management of Oil Windfalls in Mexico : Historical Experience and Policy Options for the Future |
| title_full |
Management of Oil Windfalls in Mexico : Historical Experience and Policy Options for the Future |
| title_fullStr |
Management of Oil Windfalls in Mexico : Historical Experience and Policy Options for the Future |
| title_full_unstemmed |
Management of Oil Windfalls in Mexico : Historical Experience and Policy Options for the Future |
| title_sort |
management of oil windfalls in mexico : historical experience and policy options for the future |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2001/04/1089582/management-oil-windfalls-mexico-historical-experience-policy-options-future http://hdl.handle.net/10986/19677 |
| _version_ |
1764440298109272064 |