966
Number: 04/2017
Author(s): Vugar Ahmadov, Ulvi Sarkarli, Ramiz Rahmanov
Language: English
Date: December 5, 2017
Abstract: This study aims to analyze discretionary fiscal policy in Azerbaijan, Kazakhstan, and Russia for the period of 2003-2015 using structural fiscal balance (SBB). SBB takes into the consideration the permanent component of oil revenue and therefore clearly defines the discretionary fiscal position and the aggregate demand effect of fiscal policy. The structural balances in Azerbaijan and Russia experience deficit for the most of the analyzed period. The moderate level of SBB surplus is observed in Kazakhstan. The estimated SBBs also demonstrate that fiscal policies tend to be mainly pro-cyclical in Kazakhstan and Russia. Azerbaijan conducted counter-cyclical fiscal policy for the half of the investigated period. Moreover, governments gave more importance to economic stabilization in 2009 due to the global financial crises.
Keywords: fiscal policy, structural budget balance, oil-rich countries, Azerbaijan, Kazakhstan, Russia
JEL classification: E62, H60
