This issue of the Fiscal Monitor examines the conduct of fiscal policy under the uncertainty caused by dependence on natural resource revenues. It draws on extensive past research on the behavior of commodity prices and their implications for macroeconomic outcomes, as well as on extensive IMF technical assistance to resource-rich economies seeking to improve their management of natural resource wealth.
. Procyclicality has been significant in commoditypriceupturns but less so in downturns ( Figure 1.6 ), which suggests that there has been a strong tendency for countries to spend the revenue windfalls during good times. 8 Procyclicality has tended to be higher among countries with larger commodity sectors, whereas advanced economies (Australia, Canada, Norway) have been successful in delinking expenditures from commodity prices.
Figure 1.6 .
Public Expenditure Procyclicality across Countries
Total government expenditure growth is