Econometric Testing of the Displacement Effect: the Saudi Experience

Mohammed Ageli

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we have to explore the Displacement Effect in Saudi Arabia during the period (1970-2012) for real oil GDP and Non Oil GDP. We used a method as a time series econometrics techniques to examine how far the Displacement Effect validity can be applied in Saudi economy, by Using time series annual data for the periods during (1970 to 2012), (1970 to 1990) and (1991 to 2012). Three distinct time series techniques have been applied. The results obtained from the analyses find that the Peacock and Wiseman Version of Wagnerian proposition can explain the growth of government in Saudi Arabia, which holds for both the oil and non-oil income cases, and we have a structural break in the data. The findings also note that the existence of strong causality for Peacock and Wiseman Version of Wagner‟s law in the long run.

Keywords: Displacement Effect; Co-integration; Error Correction Model; Augmented Dickey Fuller; Government Expenditure; Economic Growth; Saudi Arabia (search for similar items in EconPapers)
JEL-codes: H50 O11 O53 (search for similar items in EconPapers)
Date: 2013-07-13
New Economics Papers: this item is included in nep-ara and nep-fdg
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Citations: View citations in EconPapers (1)

Published in Journal of Transformative Entrepreneurship 2.1(2013): pp. 100-111

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:50565

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