This document discusses sovereign wealth funds (SWFs) and their potential role in macroeconomic stabilization in home economies. It begins by explaining what SWFs are and how they differ from foreign reserves, pension funds, and private wealth funds. The document then discusses several research areas related to SWFs, including their potential impacts on home countries. It finds that SWFs can help facilitate fiscal stabilization and savings. The document outlines some methodological issues in analyzing the impacts of SWFs and describes its analysis of how SWFs may reduce fiscal procyclicality and improve fiscal balances/sustainability in home countries. It finds evidence that SWFs are most effective when complemented by other fiscal institutions like rules and
Rabah Arezki - Middle East and North Africa World Bank
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
How Could Arab Oil Exporters Respond to the New Global Oil Order: Graduate t...Economic Research Forum
Ibrahim Ahmed Elbadawi - Economic Research Forum
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
How Could Arab Oil Exporters Respond to the New Global Oil Order: Graduate to Rule-based Macroeconomic Institutions
Kuwait, November 26-27, 2017
www.erf.org.eg
Sovereign Wealth Funds, Cross-border investment and Institutions: Are Arab Co...Economic Research Forum
Ibrahim Elbadawi - Economic Research Forum
Raimundo Soto - Catholic University of Chile
Chahir Zaki - Cairo University
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Kamiar Mohaddes - University of Cambridge
Hashem Pesaran - USC Dornsife INET & Trinity College, Cambridge
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Magda Kandil - Central Bank of the UAE
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Majid Al Moneef - Former Governor of the Organization of Petroleum Exporting Countries, Saudi Arabia
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
How Could Arab Oil Exporters Respond to the New Global Oil Order: Graduate to Rule-based Macroeconomic Institutions
Kuwait, November 26-27, 2017
www.erf.org.eg
Rabah Arezki - Middle East and North Africa World Bank
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
How Could Arab Oil Exporters Respond to the New Global Oil Order: Graduate t...Economic Research Forum
Ibrahim Ahmed Elbadawi - Economic Research Forum
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
How Could Arab Oil Exporters Respond to the New Global Oil Order: Graduate to Rule-based Macroeconomic Institutions
Kuwait, November 26-27, 2017
www.erf.org.eg
Sovereign Wealth Funds, Cross-border investment and Institutions: Are Arab Co...Economic Research Forum
Ibrahim Elbadawi - Economic Research Forum
Raimundo Soto - Catholic University of Chile
Chahir Zaki - Cairo University
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Kamiar Mohaddes - University of Cambridge
Hashem Pesaran - USC Dornsife INET & Trinity College, Cambridge
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Magda Kandil - Central Bank of the UAE
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Majid Al Moneef - Former Governor of the Organization of Petroleum Exporting Countries, Saudi Arabia
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
How Could Arab Oil Exporters Respond to the New Global Oil Order: Graduate to Rule-based Macroeconomic Institutions
Kuwait, November 26-27, 2017
www.erf.org.eg
Securing Economic Resilience under the New Oil Order: The Need for ReformEconomic Research Forum
Allison Holland - International Monetary Fund
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Political Institutions and Macroeconomic Outcomes in Arab Oil-Rich Economies ...Economic Research Forum
Adeel Malik, University of Oxford
ERF and AFESD conference on: Monetary and Fiscal Institutions in Resource-Rich Arab Economies
Kuwait, November 4-5, 2015
For more info, please visit www.erf.org.eg
Opening Session
While commodity volatility affects economic performance and could be associated with multiple economic ills and lack of economic development, only part of the answer lies in economics. The keynote speech will provide a political economy perspective on why some countries are able to develop resilient institutional structures, while others are not, focusing on the nature of underlying institutions in resource-rich Arab economies.
Fiscal Institutions Fiscal Institutions and Macroeconomic Management in Arab ...Economic Research Forum
Jeffrey Nugent, University of Southern California
ERF and AFESD conference on: Monetary and Fiscal Institutions in Resource-Rich Arab Economies
Kuwait, November 4-5, 2015
For more info, please visit www.erf.org.eg
Session on: Oil and Fiscal Policy
Fiscal institutions are critical links between oil prices, oil revenues, revenue volatility. As is currently witnessed, low oil prices raise questions about the sustainability of public spending and loose public finances. This is why Arab countries must now improve their budgetary institutions and overall fiscal discipline. This session will review the quality of budgetary institutions in resource-rich Arab economies. It will also examine the long-run effects of oil revenue and its volatility on economic growth, as well as the role of institutions in this relationship.
Abda El-Mahdi - Former State Minister of Finance and National Economy, Sudan
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Hoda Selim, Economic Research Forum
ERF and AFESD conference on: Monetary and Fiscal Institutions in Resource-Rich Arab Economies
Kuwait, November 4-5, 2015
For more info, please visit www.erf.org.eg
Session on: Central Bank Independence and Institutional Reforms
Optimal monetary policy response to commodity price shocks requires the presence of credible and strong institutions, which are often absent in resource-rich Arab economies. It also requires clarity about central bank versus government objectives and clear institutional arrangements about the role of each. Among the ways to achieve credibility and instill a clear division of policy responsibilities is to promote central bank independence (CBI). This section aims to examine the independence of monetary institutions in several Arab resource-rich economies as well as other institutional reform required for an effective and well-functioning GCC currency union.
This revision presentation is designed for students revising their A2 macroeconomics. It looks at the economics of currency markets and focuses in particular on different exchange rate systems and the debate over fixed versus floating currencies.
The Key factor that has resulted policy issues in equity and debt of international Finance due to the “International finance liberalization”
There are certain factors that could result policy issues in equity and debt of international finances which has furnished below.
Covering the sequence and order of financial liberalisation,
Capital controls,
exchange rate policy
asymmetric information
A2 Macroeconomics - Revision on the Balance of Paymentstutor2u
The balance of payments (BOP) records all financial transactions made between consumers, businesses and the government in one country with other nations.
The current account measures the difference between money and credit going in and out of an economy (through exports, imports and income paid on assets both home and abroad)
Regional Economic Outlook: Middle East and Central AsiaIMF
The May 2010 Regional Economic Outlook: Middle East and Central Asia reports on the implications for the region of global economic developments and presents key policy challenges and recommendations. A resumption of capital inflows and the rebound in crude oil prices have aided the recovery in the oil-exporting countries of the Middle East and North Africa. The group of oil-importing countries is expected to show marginal increase in growth in response to a pickup in trade, investment, and bank credit. A key challenge for these countries is to enhance competitiveness to raise growth rates and generate employment. In the Caucasus and Central Asia, exports have begun to pick up, the decline in remittances appears to be slowing or reversing, and capital inflows have turned positive. For 2010, a recovery across the region is projected as the global economy, and in particular Russia, picks up speed. Overall, prospects for the region are improving and the regional impact of the Dubai crisis and events in Greece has been limited so far. Nevertheless, a repricing of sovereign debt cannot be excluded, adding a degree of uncertainty to the outlook.
Securing Economic Resilience under the New Oil Order: The Need for ReformEconomic Research Forum
Allison Holland - International Monetary Fund
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Political Institutions and Macroeconomic Outcomes in Arab Oil-Rich Economies ...Economic Research Forum
Adeel Malik, University of Oxford
ERF and AFESD conference on: Monetary and Fiscal Institutions in Resource-Rich Arab Economies
Kuwait, November 4-5, 2015
For more info, please visit www.erf.org.eg
Opening Session
While commodity volatility affects economic performance and could be associated with multiple economic ills and lack of economic development, only part of the answer lies in economics. The keynote speech will provide a political economy perspective on why some countries are able to develop resilient institutional structures, while others are not, focusing on the nature of underlying institutions in resource-rich Arab economies.
Fiscal Institutions Fiscal Institutions and Macroeconomic Management in Arab ...Economic Research Forum
Jeffrey Nugent, University of Southern California
ERF and AFESD conference on: Monetary and Fiscal Institutions in Resource-Rich Arab Economies
Kuwait, November 4-5, 2015
For more info, please visit www.erf.org.eg
Session on: Oil and Fiscal Policy
Fiscal institutions are critical links between oil prices, oil revenues, revenue volatility. As is currently witnessed, low oil prices raise questions about the sustainability of public spending and loose public finances. This is why Arab countries must now improve their budgetary institutions and overall fiscal discipline. This session will review the quality of budgetary institutions in resource-rich Arab economies. It will also examine the long-run effects of oil revenue and its volatility on economic growth, as well as the role of institutions in this relationship.
Abda El-Mahdi - Former State Minister of Finance and National Economy, Sudan
ERF Conference on “Arab Oil Exporters: Coping with a New Global Oil Order”
Kuwait, November 26-27, 2017
www.erf.org.eg
Hoda Selim, Economic Research Forum
ERF and AFESD conference on: Monetary and Fiscal Institutions in Resource-Rich Arab Economies
Kuwait, November 4-5, 2015
For more info, please visit www.erf.org.eg
Session on: Central Bank Independence and Institutional Reforms
Optimal monetary policy response to commodity price shocks requires the presence of credible and strong institutions, which are often absent in resource-rich Arab economies. It also requires clarity about central bank versus government objectives and clear institutional arrangements about the role of each. Among the ways to achieve credibility and instill a clear division of policy responsibilities is to promote central bank independence (CBI). This section aims to examine the independence of monetary institutions in several Arab resource-rich economies as well as other institutional reform required for an effective and well-functioning GCC currency union.
This revision presentation is designed for students revising their A2 macroeconomics. It looks at the economics of currency markets and focuses in particular on different exchange rate systems and the debate over fixed versus floating currencies.
The Key factor that has resulted policy issues in equity and debt of international Finance due to the “International finance liberalization”
There are certain factors that could result policy issues in equity and debt of international finances which has furnished below.
Covering the sequence and order of financial liberalisation,
Capital controls,
exchange rate policy
asymmetric information
A2 Macroeconomics - Revision on the Balance of Paymentstutor2u
The balance of payments (BOP) records all financial transactions made between consumers, businesses and the government in one country with other nations.
The current account measures the difference between money and credit going in and out of an economy (through exports, imports and income paid on assets both home and abroad)
Regional Economic Outlook: Middle East and Central AsiaIMF
The May 2010 Regional Economic Outlook: Middle East and Central Asia reports on the implications for the region of global economic developments and presents key policy challenges and recommendations. A resumption of capital inflows and the rebound in crude oil prices have aided the recovery in the oil-exporting countries of the Middle East and North Africa. The group of oil-importing countries is expected to show marginal increase in growth in response to a pickup in trade, investment, and bank credit. A key challenge for these countries is to enhance competitiveness to raise growth rates and generate employment. In the Caucasus and Central Asia, exports have begun to pick up, the decline in remittances appears to be slowing or reversing, and capital inflows have turned positive. For 2010, a recovery across the region is projected as the global economy, and in particular Russia, picks up speed. Overall, prospects for the region are improving and the regional impact of the Dubai crisis and events in Greece has been limited so far. Nevertheless, a repricing of sovereign debt cannot be excluded, adding a degree of uncertainty to the outlook.
Rania Al-Mashat - Minister of Tourism
ERF 24th Annual Conference
The New Normal in the Global Economy: Challenges & Prospects for MENA
July 8-10, 2018
Cairo, Egypt
Optimal investment strategies for Sovereign Wealth Funds Alexandre Kateb
A presentation with some facts about sovereign wealth funds and some theory supporting the design of optimal strategies of SWFs. I present in detail the example of an oil stabilization fund with a critical discussion of a model outlined by the IMF staff. This should be viewed as a modest introduction to the subject and a work in progress as I will develop this topic more in depth in the coming months.
The IMF has based much of it policies on a theoretical framework developed by Polak, Mundell, and Fleming over fifty years ago. Their models were based on a set of assumptions that a do not reflect the economic realities in the developing countries. The IMF’s insistence on demand management policies created policy “blind spots” that prevented it’s acknowledgment of causes of macroeconomic imbalances other than government fiscal mismanagement. There has been some movement toward reform by the Fund and better alignment with its sister organization, the World Bank. Just as the East Asian crisis momentum for change, recent events seem to have created a significant shift in the thinking of the Fund’s staff and policy analyst. The recent global crisis has caused the Fund to acknowledge the limits of monetary policy and bring fiscal policy “center stage” as an important countercyclical tool. In short, the crisis has “exposed flaws in the pre-crisis policy framework” [Carlos E. Guice, Sr.]
Is fiscal policy effective in Brazil? An empirical analysisFGV Brazil
The main goal of this paper is to determine the effectiveness of fiscal policy in Brazil. With a sample from 1997 to 2014, we are not able to obtain the relevant impact of fiscal stimuli on output, even when altering both the methodology and the model specifications.
I prepared this slide on my research paper 'fiscal deficit and inflation ' on the current economic situation of India. In this data has been collected from economic survey 2011-12 and several other books. This slide has full data how the the central govt. and central bank uses their, fiscal policy and monetary policy respectively Hope, it will provide a good help for students who want to know about these concepts of economics.
gaurav tripathi(undergrad econ)>
here is a ppt on 'fiscal deficit and inflation'. it basically deals , that how govt. and central govt. makes their fiscal and central policy. the problems and solutions are shown. just gotta follow them. <gaurav>
Aly Rashed - Economic Research Forum
ERF 25th Annual Conference
Knowledge, Research Networks & Development Policy
10-12 March, 2019
Kuwait City, Kuwait
The Future of Jobs is Facing the Biggest Policy Induced Price Distortion in H...Economic Research Forum
Lant Pritchett - University of Oxford
ERF 25th Annual Conference
Knowledge, Research Networks & Development Policy
10-12 March, 2019
Kuwait City, Kuwait
Massoud Karshenas - University of London
ERF 25th Annual Conference
Knowledge, Research Networks & Development Policy
10-12 March, 2019
Kuwait City, Kuwait
Rediscovering Industrial Policy for the 21st Century: Where to Start?Economic Research Forum
Rohinton P. Medhora - Centre for International Governance & Innovation
ERF 25th Annual Conference
Knowledge, Research Networks & Development Policy
10-12 March, 2019
Kuwait City, Kuwait
Rana Hendy - Doha Institute
Mahmoud Mohieldin - World Bank
ERF 25th Annual Conference
Knowledge, Research Networks & Development Policy
10-12 March, 2019
Kuwait City, Kuwait
Ibrahim Elbadawi - Economic Research Forum
ERF 25th Annual Conference
Knowledge, Research Networks & Development Policy
10-12 March, 2019
KuwaitCity, Kuwait
Presentation by Jared Jageler, David Adler, Noelia Duchovny, and Evan Herrnstadt, analysts in CBO’s Microeconomic Studies and Health Analysis Divisions, at the Association of Environmental and Resource Economists Summer Conference.
Up the Ratios Bylaws - a Comprehensive Process of Our Organizationuptheratios
Up the Ratios is a non-profit organization dedicated to bridging the gap in STEM education for underprivileged students by providing free, high-quality learning opportunities in robotics and other STEM fields. Our mission is to empower the next generation of innovators, thinkers, and problem-solvers by offering a range of educational programs that foster curiosity, creativity, and critical thinking.
At Up the Ratios, we believe that every student, regardless of their socio-economic background, should have access to the tools and knowledge needed to succeed in today's technology-driven world. To achieve this, we host a variety of free classes, workshops, summer camps, and live lectures tailored to students from underserved communities. Our programs are designed to be engaging and hands-on, allowing students to explore the exciting world of robotics and STEM through practical, real-world applications.
Our free classes cover fundamental concepts in robotics, coding, and engineering, providing students with a strong foundation in these critical areas. Through our interactive workshops, students can dive deeper into specific topics, working on projects that challenge them to apply what they've learned and think creatively. Our summer camps offer an immersive experience where students can collaborate on larger projects, develop their teamwork skills, and gain confidence in their abilities.
In addition to our local programs, Up the Ratios is committed to making a global impact. We take donations of new and gently used robotics parts, which we then distribute to students and educational institutions in other countries. These donations help ensure that young learners worldwide have the resources they need to explore and excel in STEM fields. By supporting education in this way, we aim to nurture a global community of future leaders and innovators.
Our live lectures feature guest speakers from various STEM disciplines, including engineers, scientists, and industry professionals who share their knowledge and experiences with our students. These lectures provide valuable insights into potential career paths and inspire students to pursue their passions in STEM.
Up the Ratios relies on the generosity of donors and volunteers to continue our work. Contributions of time, expertise, and financial support are crucial to sustaining our programs and expanding our reach. Whether you're an individual passionate about education, a professional in the STEM field, or a company looking to give back to the community, there are many ways to get involved and make a difference.
We are proud of the positive impact we've had on the lives of countless students, many of whom have gone on to pursue higher education and careers in STEM. By providing these young minds with the tools and opportunities they need to succeed, we are not only changing their futures but also contributing to the advancement of technology and innovation on a broader scale.
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
ZGB - The Role of Generative AI in Government transformation.pdfSaeed Al Dhaheri
This keynote was presented during the the 7th edition of the UAE Hackathon 2024. It highlights the role of AI and Generative AI in addressing government transformation to achieve zero government bureaucracy
Understanding the Challenges of Street ChildrenSERUDS INDIA
By raising awareness, providing support, advocating for change, and offering assistance to children in need, individuals can play a crucial role in improving the lives of street children and helping them realize their full potential
Donate Us
https://serudsindia.org/how-individuals-can-support-street-children-in-india/
#donatefororphan, #donateforhomelesschildren, #childeducation, #ngochildeducation, #donateforeducation, #donationforchildeducation, #sponsorforpoorchild, #sponsororphanage #sponsororphanchild, #donation, #education, #charity, #educationforchild, #seruds, #kurnool, #joyhome
Jennifer Schaus and Associates hosts a complimentary webinar series on The FAR in 2024. Join the webinars on Wednesdays and Fridays at noon, eastern.
Recordings are on YouTube and the company website.
https://www.youtube.com/@jenniferschaus/videos
This session provides a comprehensive overview of the latest updates to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly known as the Uniform Guidance) outlined in the 2 CFR 200.
With a focus on the 2024 revisions issued by the Office of Management and Budget (OMB), participants will gain insight into the key changes affecting federal grant recipients. The session will delve into critical regulatory updates, providing attendees with the knowledge and tools necessary to navigate and comply with the evolving landscape of federal grant management.
Learning Objectives:
- Understand the rationale behind the 2024 updates to the Uniform Guidance outlined in 2 CFR 200, and their implications for federal grant recipients.
- Identify the key changes and revisions introduced by the Office of Management and Budget (OMB) in the 2024 edition of 2 CFR 200.
- Gain proficiency in applying the updated regulations to ensure compliance with federal grant requirements and avoid potential audit findings.
- Develop strategies for effectively implementing the new guidelines within the grant management processes of their respective organizations, fostering efficiency and accountability in federal grant administration.
Russian anarchist and anti-war movement in the third year of full-scale warAntti Rautiainen
Anarchist group ANA Regensburg hosted my online-presentation on 16th of May 2024, in which I discussed tactics of anti-war activism in Russia, and reasons why the anti-war movement has not been able to make an impact to change the course of events yet. Cases of anarchists repressed for anti-war activities are presented, as well as strategies of support for political prisoners, and modest successes in supporting their struggles.
Thumbnail picture is by MediaZona, you may read their report on anti-war arson attacks in Russia here: https://en.zona.media/article/2022/10/13/burn-map
Links:
Autonomous Action
http://Avtonom.org
Anarchist Black Cross Moscow
http://Avtonom.org/abc
Solidarity Zone
https://t.me/solidarity_zone
Memorial
https://memopzk.org/, https://t.me/pzk_memorial
OVD-Info
https://en.ovdinfo.org/antiwar-ovd-info-guide
RosUznik
https://rosuznik.org/
Uznik Online
http://uznikonline.tilda.ws/
Russian Reader
https://therussianreader.com/
ABC Irkutsk
https://abc38.noblogs.org/
Send mail to prisoners from abroad:
http://Prisonmail.online
YouTube: https://youtu.be/c5nSOdU48O8
Spotify: https://podcasters.spotify.com/pod/show/libertarianlifecoach/episodes/Russian-anarchist-and-anti-war-movement-in-the-third-year-of-full-scale-war-e2k8ai4
A process server is a authorized person for delivering legal documents, such as summons, complaints, subpoenas, and other court papers, to peoples involved in legal proceedings.
Canadian Immigration Tracker March 2024 - Key SlidesAndrew Griffith
Highlights
Permanent Residents decrease along with percentage of TR2PR decline to 52 percent of all Permanent Residents.
March asylum claim data not issued as of May 27 (unusually late). Irregular arrivals remain very small.
Study permit applications experiencing sharp decrease as a result of announced caps over 50 percent compared to February.
Citizenship numbers remain stable.
Slide 3 has the overall numbers and change.
1. SOVEREIGN WEALTH FUNDS AND
MACROECONOMIC STABILIZATION IN THE
HOME ECONOMY
Ibrahim Elbadawi (ERF)
Raimundo Soto (Pontificia Universidad Católica, Chile)
Hoda Youssef (World Bank)
2. WHY HAVING SWF?
SWF are not “foreign reserves”.
Central banks focus more on liquidity and safe-keeping of
reserves. SWFs focus on returns, diversification, and risk-taking
and to a large extent they are institution-building mechanisms
SWF are not “pension funds”
SWFs are not financed with contributions from pensioners and
do not have a stream of liabilities committed to individual
citizens.
SWF are not “private wealth funds”
Objectives of SWFs are usually more complex
Impacts of SWF on home economies may go beyond those of
foreign reserves, pension funds, or private investment vehicles 2
3. SOVEREIGN WEALTH FUNDS
Research Areas in SWF
What role for SWF?
Why are there SWF?
How to best set up and manage SWF?
What are SWF’s effects on global capital markets?
What drives SWF investment strategies?
What are SWF’s effects on home economies?
3
4. POTENTIAL IMPACT OF SWF ON HOME COUNTRIES
Facilitate fiscal stabilization and fiscal saving
Also introduce more professional and comprehensive investment
and risk management frameworks
Enhance transparency and accountability in the management of
government financial assets.
Support monetary policy
Exchange rate management, if appropriate SWF investment policies
Better management of the public-sector balance sheet
Improve asset management strategy when SWF are consistent with
an economy’s underlying macro-fiscal objectives.
Improve external stability in the current and capital account.
Relevant for countries with SWFs and/or receiving large SWF
inflows.
4
5. POTENTIAL IMPACT OF SWF ON RESOURCE-RICH
COUNTRIES
Help managing excess reserves being accumulated during good
times (particularly in countries with fixed exchange regimes).
Help break the link between resources windfalls and
government expenditures that exacerbates boom and bust
cycles. Procyclicality is a crucial issue for Arab oil-rich
countries.
In fact, it is an issue for emerging economies and resource
rich countries as well
Even “graduated countries” can have relapses (Frenkel et al,
2013). Global crisis and its aftermath. 5
6. EFFECTIVENESS OF SWF ON FISCAL
PROCYCLICALITY
Key issue: when SWFs are associated with better fiscal
outcomes, what causality?
Do countries with prudent fiscal policies tend to establish SWFs?
Do SWF help in adopting a counter-cyclical fiscal policy?
If the inception of SWF is endogenous, econometric models
would yield inconsistent (biased) estimates of the effects of the
potential contribution of SWF to dampening fiscal procyclicality
(or, more generally, supporting the fiscal stance).
6
7. EFFECTIVENESS OF SWF ON FISCAL
PROCYCLICALITY
Previous case studies.
SWF are not per-se successful in making budget expenditures
less driven by revenues availability, commitment to fiscal
discipline & sound macroeconomics are key (Fasano, 2000).
SWF do not have impact on expenditure volatility due to lack
of integration with the budget, institutional weaknesses, and
inadequate controls (Le Borgne and Medas, 2007).
Implicitly, all assume SWF are exogenous.
7
8. EFFECTIVENESS OF SWF ON FISCAL
PROCYCLICALITY
Case studies evidence for resource-rich economies.
Bjørnland and Thorsrud (2015): SWF in Norway has induced
more (not less) procyclicality with commodity prices since
2001: rule of withdrawing a fixed percentage of a growing
fund each year is not sufficiently countercyclical over the
commodity price cycle.
Corbo et al. (2016) also conclude that, by design, Chile’s SWF
rule is not countercyclical (actually, a-cyclical) and not an
adequate stabilization instrument.
8
9. EFFECTIVENESS OF SWF ON FISCAL
PROCYCLICALITY
Other studies.
SWF contribute to smoothing government expenditures in 68
resource-rich countries (Sugawara, 2014). Government
expenditures are but one part of the issue. SWF are
exogenous.
The ability to conduct countercyclical fiscal policy depends
on the quality of their institutions and/or the availability of
financial resources either in domestic or international capital
markets (Calderón et al. 2016, Frenkel et al., 2013).
Omitted from previous research
9
10. MAIN OBJECTIVES OF THIS PAPER
We investigate whether the existence of a SWF helps dampening
or overcoming fiscal procyclicality. We test the effects of SWF on
fiscal balances and, thereby, on fiscal sustainability. We discuss
whether oil-rich countries are different.
Why fiscal procyclicality?
Costly stop-and-go policies can induce macroeconomic volatility, depress
investment in real and human capital, hamper growth, and harm the poor.
Expansionary fiscal policies in good times that are not fully offset in bad times
may produce a large deficit bias and lead to debt unsustainability and
eventual default.
Complements our companion paper on investment strategies
10
11. METHODOLOGICAL ISSUES
Unveiling the impact of SWF on the fiscal stance:
Has the treatment (implementing a SWF) had any discernible effect
on fiscal procyclicality or fiscal balances?
Controlling for other potential determinants of the fiscal stance
Recognizing countries are quite heterogeneous (individual effects)
Capturing the characteristic significant inertia of fiscal variables
General model:
𝑃𝑖𝑡 = 𝑓 𝛼𝑖, 𝑥𝑖𝑡, 𝐷𝑖𝑡, 𝑃𝑖𝑡−1
Causal effects depends crucially on the validity of the implicit or
explicit identification assumptions:
Treatment must be exogenous
11
12. METHODOLOGICAL ISSUES
General econometric model:
𝑃𝑖𝑡 = 𝑓 𝛼𝑖, 𝑥𝑖𝑡, 𝐷𝑖𝑡, 𝑃𝑖𝑡−1 + 𝜀𝑖𝑡
Use dynamic panel-data models to account for heterogeneity,
fundamentals, and inertia
Instrumental variables in first-differenced model (Arellano-
Bond GMM-type estimator)
This would not solve endogeneity issues in the treatment
variable
12
13. METHODOLOGICAL ISSUES
Endogeneity of fiscal institutions
SWF may be endogenously set up as a response to the fiscal
stance: reverse causality from fiscal outcomes to SWF
Create an instrument to deal with such endogeneity
Probit-model for the presence of a SWF in 146 countries 1984-2015
Use predicted probability of having a SWF in place as instrument
“Fundamentals” –which are lagged—include
Export proceeds: foreign trade (% GDP), export concentration,
and natural resource rents (% GDP).
Macroeconomic stance and general development level:
inflation and real per capita GDP in US$.
Government revenue structures: revenue instability (coefficient
of variation of revenues computed using a rolling three-year
window) and federalism.
Idiosyncratic factors: including a dummy for GCC economies.
Institutional factors: political participation and accountability
13
14. INSTRUMENTATION OF FISCAL RULES & COUNCILS
We also control for two other key fiscal institutions: Fiscal Rules
and Fiscal Councils
These are independent public institutions aimed at strengthening
commitments to sustainable public finances through various
functions, including public assessments of fiscal plans and
performance, and the evaluation or provision of macroeconomic
and budgetary forecasts.
May be endogenous, therefore we create instruments for probability
We follow Schmidt-Hebbel and Soto (2017) to select the
appropriate set of fundamentals and generate instruments for four
national rules placing limits on government debt and government
expenditure, as well as targets on revenues and the fiscal balance. 14
15. MEASURING FISCAL PROCYCLICALITY
We define and measure procyclicality as:
Correlation of the cycle in government expenditures and the cycle of
GDP, both at constant prices.
Correlation of the cycle in fiscal balances and the cycle of GDP, both
at constant prices.
The data were obtained from World Development Indicators,
World Economic Outlook, and IMF Fiscal Database
Cycles: we de-trend variables in logs using the HP filter
Correlations: we use 10-year rolling correlations to avoid
transient phenomena (5 years yield similar results).
15
16. DETERMINANTS OF FISCAL PERFORMANCE
In addition to our SWF instrument, we control for the
following sets of “fundamentals”
Access to borrowing by governments. Capital account
openness and financial development largely determine the
ability of governments to borrow money in domestic and
external markets to fulfill their financial needs.
Institutional determinants of fiscal performance. Political
representation, political accountability, perceived political
stability of government, corruption, fiscal federalism.
Exchange-rate and monetary regimes. Exchange regime (de
jure and de facto), monetary unions.
Fiscal Institutions. Fiscal rules (instr.), fiscal councils (instr.),
fiscal revenue instability and SWF (instr.)
Cyclical phenomena. Business cycles, resource-rent cycles and
price instability.
Overall development, as customarily measured by GDP per
capita in constant US$ of 2000.
16
17. MAIN RESULTS I: PROCYCLICALITY OF
GOVERNMENT EXPENDITURES
Find significant inertia in fiscal outcomes ⇒ static models
are inadequate. 90% of a shock dissipate in 4 years.
Countries tend to have lower levels of procyclicality if
They belong to monetary unions
Inflation is low
Business cycles are smaller
Fiscal revenues are stable
We found no role for political instability, political regimes,
or political accountability.
SWF significantly lower procyclicality
Reinforced by a fiscal rule on expenditures
Not reinforced by fiscal councils.
17
18. MAIN RESULTS II: PROCYCLICALITY OF FISCAL
BALANCES
Find significant inertia in fiscal outcomes ⇒ static models
are inadequate. 90% of shocks dissipate in 9 years.
Countries tend to have lower levels of procyclicality if
They belong to monetary unions
Inflation is low
Business cycles are smaller
Fiscal revenues are stable
Political accountability (checks and balances) is high
We found no role for political instability, political regimes.
SWF significantly lower procyclicality
Reinforced by a fiscal rule on debt ceilings but (surprisingly)
hampered by balance rules
Not reinforced by fiscal councils.
18
19. MAIN RESULTS III: FISCAL BALANCES
Find significant inertia in fiscal outcomes ⇒ static models
are inadequate. 90% of shocks dissipate in 9 years.
Countries tend to have “better fiscal stance” if
They are more stable in political terms
If they conduct monetary policy using fixed exchange regimes
Hit by (transitory) upswings in business cycles or resource
prices
SWF significantly improve “fiscal stance and
sustainability”
Direct effect and indirectly by lowering revenue instability
Direct effects larger in more developed economies
Expenditure fiscal rules enhance the positive effect of SWF, but
revenue rules works in the opposite 19
20. IMPLICATIONS FOR GCC ECONOMIES
GCC countries pioneers of SWF (Kuwait, Saudi Arabia)
GCC hold around 40% of SWF wealth (2017)
Fiscal sustainability not an issue in most GCC
Fiscal procyclicality is an issue:
most SWF are not stabilizing instruments
SWF however
Are not enough to instill fiscal discipline
Have not supported building modern fiscal institutions
Are not supported by other fiscal institutions (rules, councils)
20
21. CONCLUSIONS
In this paper we:
Study the likely effects of SWF on the fiscal stance of the
home economy
Fiscal stabilization and fiscal saving (sustainability)
Fiscal procyclicality is a key issue for most Arab oil/gas exporters
Fiscal procyclicality/stability are key issues for most emerging
economies
Provide a rigorous methodology to deal with
Unobservable country heterogeneity
Isolating the role of SWF from other determinants of fiscal stance
Inertia and dynamic adjustments
Potential endogeneity of fiscal institutions: SWF, fiscal rules, fiscal
councils
21
22. CONCLUSIONS
In this paper we:
Create measures of fiscal procyclicality and instruments for
fiscal institutions
Test our models using data for 140 countries in the period
1984-2015 (data availability)
Find that SWF do have a stabilizing effect in the home
economy as they reduce fiscal procyclicality
Find that SWF do increase fiscal sustainability in the home
economy as they improve fiscal balances
Other fiscal institutions complement and amplify the benefits
of SWF, such as fiscal rules and (less clearly) fiscal councils
Are aware that SWF can have other unmeasurable benefits
(fiscal transparency, accountability, etc.)
Suggests a road for GCC as well as non-GCC MENA countries
22
24. MAIN TYPES OF SWF
Stabilization funds
Savings funds
Reserve investment corporations
Development funds
Contingent/pension reserve funds
We do not separate SWF by type since
SWF may be hybrids
Money is fungible (with varying costs)
Circumstances dictate
24
29. FIGURE 1
PROCYCLICALITY IN GOVERNMENT EXPENDITURES AND DEVELOPMENT LEVEL, 1980-2015
29
On average, negative
relationship …
… but there’s a lot of
heterogeneity
Per capita GDP US$ 13,500
30. FIGURE 2
PROCYCLICALITY IN GOVERNMENT EXPENDITURES AND RESOURCE RENTS, 1980-2015
30
On average, positive
relationship …
… but there’s a lot of
heterogeneity
Rents per capita US$ 500
31. ON GRADUATION FROM FISCAL PROCYCLICALITY
FRANKEL, VEGH, VULETIN, 2013
31
Fiscal Procyclicality
Fiscal Countercyclicality
32. ON GRADUATION FROM FISCAL PROCYCLICALITY
FRANKEL, VEGH, VULETIN, 2013
32