Fiscal policy challenges in the resource-rich countries
Summary
The reliance of economies on commodity exports may cause heightened volatility in fiscal policy due to the inherent unpredictability of commodity prices. This paper employs a comparative analysis using data spanning from 2003 to 2022 across several oil-exporting countries to assess fiscal policy volatility in such nations.
The findings reveal a discernible elevation in fiscal policy volatility among oil exporters, underscoring the need for effective mitigation strategies. Moreover, the paper discusses various fiscal rules, their advantages, and drawbacks, while also examining Azerbaijan's current fiscal rule landscape and the need for further analysis on the procyclicality of its fiscal policy.