Plante, Michael (2011): The long-run macroeconomic impacts of fuel subsidies in an oil-importing developing country.
Download (402Kb) | Preview
Analytical and numerical results show how the presence of a subsidy on household and firm purchases of oil products distorts long-run macroeconomic aggregates in an oil-importing developing country. Beyond leading to over-consumption of oil products these subsidies also lead to increased labor supply, a distorted emphasis on producing traded goods, and higher real wages. The subsidy also impacts the relative price of non-traded goods, causing it to fall when the non-traded sector is more oil-intensive than the traded sector and vice-versa.
|Item Type:||MPRA Paper|
|Original Title:||The long-run macroeconomic impacts of fuel subsidies in an oil-importing developing country|
|Keywords:||oil, fuel-price subsidies, developing countries, fiscal policy|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy
O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O23 - Fiscal and Monetary Policy in Development
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H30 - General
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy
|Depositing User:||Michael Plante|
|Date Deposited:||30. Sep 2011 17:11|
|Last Modified:||12. Feb 2013 17:07|
Bacon, R., and M. Kojima (2006): How are Developing Countries Coping with Higher Oil Prices?, World Bank, ESMAP report.
Baig, T., A. Mati, D. Coady, and J. Ntamatungiro (2007): Domestic Petroleum Product Prices and Subsidies: Recent Developments and Reform Strategies, IMF Working Paper, WP/07/71.
Bouakez, H., N. Rebei, and D. Vencatachellum (2008): Optimal Pass-Through of Oil Prices in an Economy with Nominal Rigidities, CIRPEE Working Paper.
Coady, D., M. El-Said, R. Gillingham, K. Kpodar, P. Medas, and D. Newhouse (2006): The Magnitude and Distribution of Fuel Subsidies: Evidence from Bolivia, Ghana, Jordan, Mali, and Sri Lanka, IMF Working Paper, WP/06/247.
Coady, D., R. Gillingham, R. Ossowski, J. Piotrowski, S. Tareq, and J. Tyson (2010): Petroleum Product Subsidies: Costly, Inequitable, and Rising, IMF Staff Position Note, SPN/10/05.
del Granado, J. A., D. Coady, and R. Gillingham (2010): The Unequal Benefits of Fuel Subsidies: A Review of Evidence for Developing Countries, IMF Working Paper, WP/10/202.
IMF (2008): Bangladesh, Staff Report for 2008 Article IV Consultation.
IMF (2010): Arab Republic of Egypt, Staff Report for 2010 Article IV Consultation.
Said, M. E., and D. Leigh (2006): Fuel Price Subsidies in Gabon: Fiscal Cost and Distributional Impact, IMF Working Paper.