By definition, fiscal dominance impedes the effective implementation of any monetary strategy aimed at controlling inflation. Economies that exhibit oil dominance-a situation in which oil exports largely affect the main macroeconomic indicators-may also exhibit fiscal dominance. However, in this...

A short-run macroeconomic model is estimated for Venezuela, in order to examine the hypothesis that the availability of oil resources may entail a confidence effect—on perceived future incomes—that influences the expenditure and portfolio behavior of economic agents. Such confidence effect...

This paper reviews economic developments in Venezuela during 1995–97. The overall public sector balance shifted from a deficit of 7 percent of GDP in 1995 to a surplus of 71⁄4 percent of GDP in 1996. This massive swing was owing to a major increase in the underlying oil surplus, a decline in...

This paper describes economic developments in Venezuela during the 1990s. Economic conditions remained difficult in 1995. Continued problems in the banking system, higher public sector interest obligations, a decline in oil revenues, and deterioration in the non-oil fiscal balance kept the...

This paper provides a background on the key policy challenges for Slovenia in the euro zone. Then, it assesses the discretionary scope to adjust spending and proposes initial steps to enhance budget flexibility so that fiscal adjustment can be targeted on relatively inefficient spending. This...

The spike in Slovenian inflation in 2007–08 has shown how structural bottlenecks may hamper Slovenian growth in the future. This Selected Issues paper investigates the role of supply factors and demand-side effects in explaining this surge. The paper concludes that the spike in Slovenian...