02277cas a2200265 a 4500 AALejournalIMF013660 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484393000 1018-5941 BD-DhAAL BD-DhAAL Richmond, Christine. Investing Volatile Oil Revenues in Capital-Scarce Economies : An Application to Angola / Christine Richmond, Irene Yackovlev, Susan Yang. Washington, D.C. : International Monetary Fund, 2013. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Natural resource revenues are an increasingly important financing source for public investment in many developing economies. Investing volatile resource revenues, however, may subject an economy to macroeconomic instability. This paper applies to Angola the fiscal framework developed in Berg and others (forthcoming) that incorporates investment inefficiency and absorptive capacity constraints, often encountered in developing countries. The sustainable investing approach, which combines a stable fiscal regime with external savings, can convert resource wealth to development gains while maintaining economic stability. Stochastic simulations demonstrate how the framework can be used to inform allocations between capital spending and external savings when facing uncertain oil revenues. An overly aggressive investment scaling-up path could result in insufficient fiscal buffers when faced with negative oil price shocks. Consequently, investment progress can be interrupted, driving up the capital depreciation rate, undermining economic stability, and lowering the growth benefits of public investment. Mode of access: Internet Yackovlev, Irene. Yang, Susan. IMF Working Papers; Working Paper ; No. 2013/147 Full text available on IMF http://elibrary.imf.org/view/journals/001/2013/147/001.2013.issue-147-en.xml IMF e-Library