Economic Growth and Government Spending in Saudi Arabia: an Empirical Investigation

Saad Alshahrani and Ali Al-Sadiq

No 2014/003, IMF Working Papers from International Monetary Fund

Abstract: This paper empirically examines the effects of different types of government expenditures, on economic growth in Saudi Arabia. We use different econometric techniques to estimate the short- and long-run effects of these expenditures on growth and employ annual data over the period 1969-2010. Our findings indicate that while private domestic and public investments, as well as healthcare expenditure, stimulate growth in the long-run, openness to trade and spending in the housing sector can also boost short-run production. These findings draw some policy implications for Saudi policymakers on maximizing the returns of the government spending on economic growth.

Keywords: WP; government expenditure; government spending; growth rate; government consumption expenditure; Economic Growth; Oil Exporting Economy; Saudi Arabia; housing expenditure shock; financing investment; consumption activity; Total expenditures; Capital spending; Current spending; Health care spending; Global; Middle East; North Africa; East Africa; Africa (search for similar items in EconPapers)
Pages: 26
Date: 2014-01-13
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Citations: View citations in EconPapers (40)

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