Bremer, Ton van den; Ploeg, Frederick van der; Wills, Samuel - Crawford School of Public Policy, Australian National … - 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 …