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Middle East and Central Asia > Saudi Arabia

You are looking at 1 - 10 of 31 items for :

  • Type: Journal Issue x
  • Macroeconomics: Consumption; Saving; Wealth x
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Cover IMF Working Papers
Automation and Welfare: The Role of Bequests and Education
Manuk Ghazanchyan
,
Alexei Goumilevski
, and
Alex Mourmouras
This paper examines the welfare effects of automation in neoclassical growth models with and without intergenerational transfers. In a standard overlapping generations model without such transfers, improvements in automation technologies that would lower welfare can be mitigated by shifts in labor supply related to demographics or pandemics. With perfect intergenerational transfers based on altruism, automation could raise the well-being of all generations. With imperfect altruism, fiscal transfers (universal basic income) and public policies to expand access to education opportunities can alleviate much of the negative effect of automation.
Keywords:
Automation; Aging; Altruism; Fiscal Policy; Education; Overlapping Generations; appendix B. Replicating Kotlikoff; automation technology; IMF working papers; welfare effect; S model; production function; Income; Human capital; Consumption; Global
Cover IMF Working Papers
OPEC and the Oil Market
Mr. Andrea Pescatori
and
Yousef F. Nazer
This paper studies the historical importance of OPEC for oil price fluctuations. An event-study approach is used to identify the effects of OPEC announcements on oil price fluctuations. Results show that price volatility is higher than typical around OPEC meetings. Also, members' compliance, a proxy for credibility, has strongly fluctuated over time. An ordered multinomial logit framework identifies the main factors that explain OPEC's decisions to cut, maintain, or boost members' oil production and is able to successfully predict OPEC meeting outcomes 66 percent of the time, between 1989 and 2019. Cyclical oil price fluctuations (as opposed to persistent shifts in levels) drive OPEC’s decisions, suggesting that OPEC's objective is to stabilize the oil price rather than countering fundamental shifts in demand and supply. Low OPEC’s market share reduces the probability of a production cut. Finally, the transparency of OPEC's statements has modestly improved between 2002 and 2019.
Keywords:
OPEC Meetings; Credibility; Oil Price; Text Analysis; OPEC+; OPEC meeting; OPECS decision; OPEC announcement; OPECS objective; OPECS statement; Oil prices; Oil; Oil consumption; Commodity price fluctuations; Oil production; Global
Cover Policy Papers
Economic Prospects and Policy Challenges for the GCC Countries - 2021
International Monetary Fund
GCC policymakers moved quickly to mitigate the health and economic impacts of twin COVID-19 and oil price shocks. Infection rates have declined across the GCC to well below previous peaks, though countries have experienced successive waves of the virus, and economic recoveries have begun to take hold. Nevertheless, GCC policymakers must navigate a challenging and uncertain landscape. The pandemic continues to cloud the global outlook as countries are in different phases of recovery, with varied growth prospects and policy space
Keywords:
oil market development; oil growth; oil balance; climate change impact; GCC economy; Oil prices; COVID-19; Oil consumption; Climate change; Global; Fiscal stance
Cover IMF Working Papers
The Role of Market Structure and Timing in Determining VAT Pass-Through
Mr. Matthieu Bellon
We examine the role of market characteristics and timing in explaining observed heterogeneity in VAT pass-through. We first extend existing theory to characterize the roles of imperfect competition and product differentiation, then investigate these relationships empirically using a panel of 14 Eurozone countries between 1999 and 2013. We find important roles for product market regulation and product quality, and little impact of advance announcement of reforms. Our findings have important implications for policy-makers considering VAT rate adjustments, by illuminating which of the consumers or the producers would experience the brunt of a reform across different settings.
Keywords:
Value added tax; Price effect; Pass through; Competition; Product Differentiation; pass-through heterogeneity; VAT pass-through; pass-through effect; baseline pass-through; elasticity coefficient; imperfect competition; pass-through adjustment; Value-added tax; Consumption; Commodity markets; Consumer prices; Europe
Cover Departmental Papers
The Future of Oil and Fiscal Sustainability in the GCC Region
Mr. Tokhir N Mirzoev
,
Ling Zhu
,
Yang Yang
,
Ms. Tian Zhang
,
Mr. Erik Roos
,
Mr. Andrea Pescatori
, and
Mr. Akito Matsumoto
The oil market is undergoing fundamental change. New technologies are increasing the supply of oil from old and new sources, while rising concerns over the environment are seeing the world gradually moving away from oil. This spells a significant challenge for oil-exporting countries, including those of the Gulf Cooperation Council (GCC) who account for a fifth of the world’s oil production. The GCC countries have recognized the need to reduce their reliance on oil and are all implementing reforms to diversify their economies as well as fiscal and external revenues. Nevertheless, as global oil demand is expected to peak in the next two decades, the associated fiscal imperative could be both larger and more urgent than implied by the GCC countries’ existing plans.
Keywords:
DPPP; DP; price; demand; GCC country; GCC region; oil demand; hydrocarbon GDP; market share; price assumption; GCC government; Oil prices; Oil consumption; Oil; Fiscal consolidation; Fiscal stance; Global; data IMF Library; research department; Energy conservation; Middle East and Central Asia
Cover IMF Working Papers
Macroeconomic Effects of Reforms on Three Diverse Oil Exporters: Russia, Saudi Arabia, and the UK
Samya Beidas-Strom
and
Marco Lorusso
We build and estimate open economy two-bloc DSGE models to study the transmission and impact of shocks in Russia, Saudi Arabia and the United Kingdom. After accounting for country-specific fiscal and monetary sectors, we estimate their key policy and structural parameters. Our findings suggest that not only has output responded differently to shocks due to differing levels of diversification and structural and policy settings, but also the responses to fiscal consolidation differ: Russia would benefit from a smaller state foot-print, while in Saudi Arabia, unless this is accompanied by structural reforms that remove rigidities, output would fall. We also find that lower oil prices need not be bad news given more oil-intensive production structures. However, lower oil prices have hurt these oil producers as their public finances depend heavily on oil, among other factors. Productivity gains accompanied by ambitious structural reforms, along with fiscal and monetary reforms could support these economies to achieve better outcomes when oil prices fall, including via diversifying exports.
Keywords:
WP; exchange rate; monetary policy; trade balance; labour market; DSGE model; Economic diversification; Shocks and commodity exporters; Bayesian estimation; Fiscal policy; Inflation targeting; Managed float; Oil intensity; nominal interest rate; state footprint; UK macroeconomy; UK experience; price indexation; UK policy rate; UK model; core inflation; UK state; UK benchmark; oil demand; Oil prices; Oil; gas and mining taxes; Consumption; Global
Cover IMF Working Papers
An Analysis of OPEC’s Strategic Actions, US Shale Growth and the 2014 Oil Price Crash
Mr. Alberto Behar
and
Robert A Ritz
In November 2014, OPEC announced a new strategy geared towards improving its market share. Oil-market analysts interpreted this as an attempt to squeeze higher-cost producers including US shale oil out of the market. Over the next year, crude oil prices crashed, with large repercussions for the global economy. We present a simple equilibrium model that explains the fundamental market factors that can rationalize such a "regime switch" by OPEC. These include: (i) the growth of US shale oil production; (ii) the slowdown of global oil demand; (iii) reduced cohesiveness of the OPEC cartel; (iv) production ramp-ups in other non-OPEC countries. We show that these qualitative predictions are broadly consistent with oil market developments during 2014-15. The model is calibrated to oil market data; it predicts accommodation up to 2014 and a market-share strategy thereafter, and explains large oil-price swings as well as realistically high levels of OPEC output.
Keywords:
WP; market share; OPEC supply; production capacity; market power; Crude oil; OPEC; price crash; shale oil; limit pricing; regime switch; OPEC producer; OPEC capacity; OPEC statistics; Oil prices; Oil; Demand elasticity; Futures; Public expenditure review; Global; oil price crash; shale growth; calibration approach; oil supply and demand growth; strategic action; Oil consumption; Oil production
Cover IMF Staff Country Reports
Algeria: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
This paper develops a structural macroeconomic model for Algeria that can help inform the discussion of the policy choices faced by the authorities. The model captures the core dynamics of Algeria’s macro-economy and provides an organizing framework for forecasting and policy analysis that can facilitate an assessment of the optimal policy responses to oil shocks and the implications for macroeconomic stability. This paper also examines Algeria’s main subsidies and proposes reform strategies, drawing on cross-country experiences, and discusses the channels through which a prolonged period of low oil prices may affect the banking sector, together with the policies needed to mitigate emerging financial stability risks.
Keywords:
ISCR; CR; subsidy; price; subsidy reform; sequence price; exchange rate depreciation; oil price shock; market import price; import price Phillips curve; price fluctuation; fiscal consolidation strategy; breakeven price; rating methodology; asset quality; Oil prices; Inflation; Energy subsidies; Commercial banks; Consumption; Global; Middle East and Central Asia; Middle East; North Africa; East Africa
Cover Policy Papers
Gulf Cooperation Council (GCC)—Energy Price Reforms in the GCC—What Can Be Learned From International Experiences?
International Monetary Fund
Energy prices in the GCC countries are low by international standards. These low prices have co-existed with rapid economic development in the region over the past 50 years, but the costs of this policy have also risen in terms of very high energy usage per capita. Providing energy at low prices has also effectively absorbed resources that could otherwise have been invested in human and physical capital or saved for future generations. The implicit cost of low energy prices in the GCC, in terms of foregone revenue, is estimated to be around 5 percent of GDP (about 8 percent of non-oil GDP) this year. GCC countries have been embarking on energy price reform in recent years. The recent decision of the UAE to remove fuel subsidies is an important initiative. Nevertheless, energy prices are generally still below international levels and differ substantially across the GCC countries. In most countries, further steps are needed to raise energy prices to reduce the growth in energy consumption and to support the fiscal adjustment that is necessary in the current lower oil price environment. Evidence in this paper suggests the inflationary impact of higher energy prices in the GCC is likely to be small, and while there may be some adverse effect on growth in the near-term, over the longer-term the growth benefits should be positive. Given the low weight of energy products in the CPI, first round effects of higher energy prices should be limited, while well anchored inflation expectations should help prevent second-round effects. On growth, a gradual increase in energy prices should have a manageable impact on industrial activity, although energy intensive industries will be adversely affected and will need to adjust. In the longer-term energy price reforms could generate significant permanent real income gains for the economy as a whole. More broadly, international experiences suggest that the likelihood of success with energy price reforms increases if the reforms are
Keywords:
PP; price; opportunity cost; firm; estimate; sales; energy price; GCC country; stock price change; price mechanism; price shock; mechanism implementation; natural gas; fuel price; natural gas price; gap approach; price benchmark; oil price environment; Energy prices; Fuel prices; Inflation; Price adjustments; Consumption; Global
Cover IMF Working Papers
Policy and Spillover Analysis in the World Economy: A Panel Dynamic Stochastic General Equilibrium Approach
Mr. Francis Vitek
This paper develops a structural macroeconometric model of the world economy, disaggregated into forty national economies. This panel dynamic stochastic general equilibrium model features a range of nominal and real rigidities, extensive macrofinancial linkages, and diverse spillover transmission channels. A variety of monetary policy analysis, fiscal policy analysis, spillover analysis, and forecasting applications of the estimated model are demonstrated. These include quantifying the monetary and fiscal transmission mechanisms, accounting for business cycle fluctuations, and generating relatively accurate forecasts of inflation and output growth.
Keywords:
WP; Monetary policy analysis; Fiscal policy analysis; Spillover analysis; Forecasting; World economy; Panel dynamic stochastic general equilibrium model; Bayesian econometrics; price inflation; shadow price; recipient economy; constant returns to scale; marginal revenue; stochastic process; utility function; Phillips curve; financial asset; risk premium shock; markup shock; production function; Consumption; Terms of trade; Return on investment; Dynamic stochastic general equilibrium models; Inflation; Global; Africa