Van Den Bremer, Ton; van der Ploeg, Frederick; Wills, Samuel - C.E.P.R. Discussion Papers - 2014
Oil exporters typically do not consider below-ground assets when allocating their sovereign wealth fund portfolios, and … ignore above-ground assets when extracting oil. We present a unified framework for considering both. Subsoil oil should alter … any unhedged volatility must be managed by precautionary savings. If oil prices are pro-cyclical, oil should be extracted …