02063cas a2200241 a 4500 AALejournalIMF017120 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475536775 1018-5941 BD-DhAAL BD-DhAAL Primus, Keyra. Fiscal Rules for Resource Windfall Allocation : The Case of Trinidad and Tobago / Keyra Primus. Washington, D.C. : International Monetary Fund, 2016. 1 online resource (49 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 Managing resource revenues is a critical policy issue for small open resource-rich countries. This paper uses an open economy dynamic stochastic general equilibrium model to analyze the transmission of resource price shocks and a shock to resource production in the Trinidad and Tobago economy. It also applies alternative fiscal rules to determine the optimal allocation of resource windfalls between spending today and saving in a sovereign wealth fund. The results show that spending all the resource windfall on consumption and investment creates more volatility and amplifies Dutch disease effects, when compared to the case where all the excess revenues are saved. Also, neither a policy of full spending nor full saving of the surplus revenue inflows is optimal if the government is concerned about both household welfare and fiscal stability. In order to minimize deviations from both objectives, the optimal fiscal response suggests that a larger fraction of the resource windfalls should be saved. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2016/188 Full text available on IMF http://elibrary.imf.org/view/journals/001/2016/188/001.2016.issue-188-en.xml IMF e-Library