Oil Rules : Kazakhstan's Policy Options in a Downturn

This report assesses the role of fiscal rules for countercyclical economic management in Kazakhstan and simulates the behavior of different types of fiscal rules. The work represents technical assistance to the ministry of economy and budget planning and has been financed by the joint economic research program between the government of Kazakhstan and the World Bank. Kazakhstan adopted a fixed fiscal rule in 2010 and introduced changes to it in 2012. By keeping the annual amount transferred from the fund to the budget constant, Kazakhstan's rule is more stringent than pure application of the permanent rule will imply. This report's five chapters outline the advantages of Kazakhstan's current fiscal rule and its performance against other types of rules. Chapter one reviews the performance of the Kazakh economy and the policy stance of the authorities over the last 10 years. Chapter two argues that fiscal rules should be simple and transparent; presenting evidence that Kazakhstan's current fiscal rule meets these two criteria. Chapter three presents the results of simulations of different global economic scenarios and the expected impacts on key variables in Kazakhstan, considering scenarios as elected in close consultation with the Kazakh authorities. Chapter four uses the results of these simulations to test the performance of different types of fiscal rules. Chapter five responds to a government request to review the literature on the use of fiscal and monetary policy for countercyclical economic management.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2013
Subjects:	AGGREGATE DEMAND, ASSET PRICE, ASSET PRICES, BAILOUT, BAILOUTS, BANKING CRISES, BANKING CRISIS, BANKING REGULATION, BANKING SECTOR, BANKING SUPERVISION, BANKING SYSTEM, BENCHMARK, BENEFICIARIES, BENEFICIARY, BUDGET CONSTRAINTS, BUDGET DEFICIT, BUDGET SURPLUS, BUSINESS CYCLE, BUSINESS ENVIRONMENT, CAPITAL ACCOUNT, CAPITAL ACCUMULATION, CAPITAL INFLOWS, CAPITAL STOCK, CASH PAYMENT, CASH TRANSFER, CENTRAL BANK, CENTRAL BANKS, COMMERCIAL BANK, COMMERCIAL BANK CREDIT, COMMERCIAL BANKS, COMMERCIAL CREDIT, COMMODITIES, COMMODITY, COMMODITY PRICES, COMMUNICATIONS DEVELOPMENT, CONSUMERS, CREDIBILITY, CREDIT EXPANSION, CREDIT MARKETS, CREDITORS, CURRENCY, CURRENT ACCOUNT DEFICITS, DEBT, DEBT FINANCING, DEBT SERVICE, DEFICIT SPENDING, DEPOSIT, DEPOSIT INSURANCE, DEPOSITOR, DEREGULATION, DEVALUATION, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DISCOUNT RATE, DISCOUNTED VALUE, DOMESTIC DEBT, DOMESTIC ECONOMY, DOMESTIC MARKET, ECONOMIC CRISIS, ECONOMIC DOWNTURN, ECONOMIC FLUCTUATIONS, ECONOMIC PERFORMANCE, ECONOMIC RESEARCH, ENFORCEABILITY, ENFORCEMENT MECHANISMS, EQUILIBRIUM PRICES, EXPENDITURE, EXPENDITURES, EXPORTS, EXPOSURE, EXTENDED UNEMPLOYMENT, EXTERNAL BORROWING, EXTERNAL DEBT, EXTERNAL INDEBTEDNESS, FINANCIAL ASSETS, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL DEVELOPMENT, FINANCIAL INSTABILITY, FINANCIAL MARKETS, FINANCIAL SECTOR, FINANCIAL SECTOR DEVELOPMENT, FISCAL DEFICIT, FISCAL DEFICITS, FISCAL DISCIPLINE, FISCAL POLICIES, FISCAL POLICY, FIXED INCOME, FIXED INVESTMENT, FORECASTS, FOREIGN CURRENCY, FOREIGN DEBTS, FOREIGN DIRECT INVESTMENT, FOREIGN EXCHANGE, FUTURES, GDP PER CAPITA, GLOBAL FINANCIAL MARKETS, GOVERNMENT ASSET, GOVERNMENT BORROWING, GOVERNMENT BUDGET, GOVERNMENT DEBT, GOVERNMENT EXPENDITURE, GOVERNMENT EXPENDITURES, GOVERNMENT POLICY, GOVERNMENT REVENUES, GOVERNMENT SPENDING, GROSS DOMESTIC PRODUCT, HOLDINGS, HOUSEHOLD INCOME, INCOME INSTRUMENTS, INCOME SMOOTHING, INCOME TAX, INFLATION, INSTRUMENT, INTEREST COST, INTEREST RATE, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL CAPITAL, INTERNATIONAL CAPITAL MARKETS, INVESTMENT CLIMATE, INVESTMENT INCOME, INVESTMENT POLICIES, INVESTMENT POLICY, INVESTMENT PORTFOLIO, INVESTMENT RATES, INVESTMENT SPENDING, JOB CREATION, LABOR MARKET, LEGAL FRAMEWORK, LENDERS, LIQUIDATION, LIQUIDITY, LIVING STANDARDS, LOAN, LOAN PORTFOLIO, LOCAL ECONOMY, LOCAL GOVERNMENT, LONG-TERM INTEREST, LONG-TERM INTEREST RATE, MACROECONOMIC ADJUSTMENTS, MACROECONOMIC CONDITIONS, MACROECONOMIC MANAGEMENT, MACROECONOMIC POLICY, MACROECONOMIC STABILITY, MACROECONOMIC VARIABLES, MARKET CONDITIONS, MARKET PRICES, MIDDLE- INCOME ECONOMY, MIDDLE-INCOME ECONOMY, MONETARY FUND, MONETARY POLICY, MONEY MARKET, MONEY MARKET INSTRUMENTS, MONEY SUPPLY, MORAL HAZARD, MULTIPLIERS, NATIONAL ECONOMY, NATIONAL SAVINGS, NATURAL RESOURCES, NEGATIVE SHOCKS, NONPERFORMING LOANS, OIL PRICE, OIL PRICES, OIL RESERVES, OUTPUT, OUTPUT GAP, PENSION, PENSION FUND, PENSION FUNDS, PENSION SYSTEM, PER CAPITA INCOME, PER CAPITA INCOMES, PERMANENT INCOME, PERMANENT INCOME HYPOTHESIS, POLICY RESPONSES, PRICE FLUCTUATIONS, PRIVATE CREDITS, PRIVATE PENSION, PRODUCTIVITY, PRODUCTIVITY GROWTH, PROPERTY RIGHTS, PRUDENTIAL REGULATION, PRUDENTIAL REGULATIONS, PUBLIC DEBT, PUBLIC SPENDING, RAPID GROWTH, RATE OF RETURN, REAL ESTATE, REAL ESTATE LENDING, REAL EXCHANGE RATE, REAL GDP, RECESSION, REGULATORS, REGULATORY FRAMEWORK, REMITTANCES, REPAYMENT, REPO, RESERVE, RESERVE REQUIREMENTS, RESERVES, RETURN, RETURNS, SAFETY NET, SHAREHOLDERS, SOCIAL INSURANCE FUND, SOCIAL SAFETY NET, TAX, TAX CODE, TAX COLLECTIONS, TAX RATE, TAX REVENUES, TAXATION, TECHNICAL ASSISTANCE, TOTAL FACTOR PRODUCTIVITY, TRANSFER OF FUNDS, TRANSITION ECONOMY, TRANSPARENCY, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, UNSECURED CREDIT, VOLATILITY, WEALTH, WORLD ECONOMY,
Online Access:	http://documents.worldbank.org/curated/en/2013/01/18715166/oil-rules-kazakhstans-policy-options-downturn https://hdl.handle.net/10986/16721
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