TY - BOOK ID - 11273690 TI - How Much Is Enough? Monte Carlo Simulations of an Oil Stabilization Fund for Nigeria PY - 2006 SN - 1451864027 1462353843 1452701407 9786613829658 1452716846 1283517205 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Electronic books. -- local. KW - Petroleum industry and trade -- Nigeria -- Finance. KW - Petroleum products -- Prices -- Nigeria. KW - Petroleum products KW - Petroleum industry and trade KW - Prices KW - Finance. KW - Mazut KW - Energy industries KW - Oil industries KW - Petroleum KW - Hydraulic fluids KW - Refining KW - Budgeting KW - Macroeconomics KW - Public Finance KW - Taxation KW - Energy: Demand and Supply KW - Business Taxes and Subsidies KW - Fiscal Policy KW - National Budget KW - Budget Systems KW - National Government Expenditures and Related Policies: General KW - Public finance & taxation KW - Budgeting & financial management KW - Oil prices KW - Oil, gas and mining taxes KW - Fiscal policy KW - Budget planning and preparation KW - Expenditure KW - Budget KW - Expenditures, Public KW - Nigeria UR - https://www.unicat.be/uniCat?func=search&query=sysid:11273690 AB - In oil-dependent countries, a major issue is how to stabilize fiscal spending when government revenue fluctuates along with the international price of oil. A stabilization fund would allow the government to pull through an oil price trough and absorb windfall revenue when prices are high. This paper focuses on two key issues. First, the paper proposes to base government spending on moving averages of past oil prices that are shown to behave nearly as a random walk. Second, it uses Monte Carlo simulations of a fiscal policy model to look at the probability that a given level of assets in the stabilization fund is exhausted over a certain number of years. The simulations show that with a fiscal policy based on moving averages over three to five years, a stabilization fund of about 75 percent of 2004 oil revenue would be adequate, which, in Nigeria, would equate to US$16-18 billion. ER -