Global Imbalances and Petrodollars


  • We would like to thank Ali Alichi, Rudolfs Bems, Tim Callen, Irineu de Carvalho Filho, Enrica Detragiache, Aasim Husain, Mohsin Khan, Leslie Lipschitz, Paulo Mauro, Gian Maria Milesi-Ferretti, Marc Quintyn, Abdelhak Senhadji and participants at an IMF Institute Seminar for helpful comments and discussions. The views expressed herein are those of the author and should not be attributed to the IMF, its Executive Board or its management. All remaining errors are our own.


Oil exporters have run large current account surpluses. We explore oil exporters’ role in the global imbalances debate. Current account dynamics are estimated for oil-exporting countries and the rest of the world. We find that fiscal policy has a much stronger effect on the current account of oil exporters than on current accounts of other countries. The current account adjustment of oil-exporting countries is also faster. Fiscal policy of oil exporters can have a significant and speedy impact on global imbalances. The impact via the adjustment of exchange rates might not be effective.