| Description |
1 online resource (27 pages) : illustrations |
| Series |
Discussion paper / Council on Foreign Relations |
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Discussion paper (Council on Foreign Relations)
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| Summary |
The best single measure of the resilience of an oil- or gas-exporting economy is not its fiscal breakeven but rather its external breakeven price--the oil price that covers its import bill. The external breakeven highlights how currency moves are often able to substitute, at least in part, for adjustments to the budget: a weaker currency raises the local currency proceeds from the export of a barrel of oil, stabilizing revenue. An external breakeven price below the global oil price thus indicates a potential for either additional fiscal spending or currency appreciation; a breakeven price above the global oil price indicates an underlying pressure for budget cuts or depreciation, at least in the absence of substantial buffers of reserves or borrowing capacity. Unlike fiscal breakevens, external breakevens can be calculated in a consistent way across time and across countries, using data that is relatively easy to verify. The recent evolution of external breakeven prices challenges aspects of the conventional wisdom about the relative vulnerability of different oil-exporting economies |
| Notes |
"July 2017"--Cover |
| Bibliography |
Includes bibliographical references (pages 25-27) |
| Notes |
"This Discussion Paper, produced by CFR's Maurice R. Greenberg Center for Geoeconomic Studies, was made possible through the generous support of the Alfred P. Sloan Foundation." |
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Online resource; title from PDF cover page (CFR, viewed July 28, 2017) |
| Subject |
Fiscal policy.
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Petroleum industry and trade -- Economic aspects -- Evaluation
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Petroleum products -- Prices -- Economic aspects -- Evaluation
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Fiscal policy.
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| Form |
Electronic book
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| Author |
Frank, Cole V., author
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Council on Foreign Relations, publisher.
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