In this seminar Wee Chian Koh will provide an overview of his recent paper ‘Fiscal Policy in Oil-Exporting Countries: The Roles of Oil Funds and Institutional Quality’.This paper examines the roles of oil funds and institutional quality in reducing fiscal pro-cyclicality and macroeconomic volatility in 42 oil-exporting countries from 1960 to 2012 using panel vector autoregression techniques. His results show that oil funds are effective in reducing fiscal pro-cyclicality in countries with high institutional quality but not necessarily so in those with low institutional quality. However, oil funds are associated with reduced macroeconomic volatility in countries with low institutional quality. For countries with high institutional quality, volatility is considerably low therefore the scope for further volatility reduction through oil funds is limited.

Wee Chian Koh is a second year PhD student in Economics at the Centre for Applied Macroeconomic Analysis (CAMA). His research is on empirical macroeconomics focusing on oil-exporting countries. He is also an Associate Researcher at the Centre for Strategic and Policy Studies (CSPS) in Brunei Darussalam.

The CAMA Macroeconomics Brown Bag Seminars offer CAMA speakers, in particular PhD students, an opportunity to present their work in progress in front of their peers, and reputable visitors to showcase their work.