The impact of government expenditure on GDP in the State of Qatar: a nonlinear ARDL approach

Ashraf Galal Eid

International Journal of Sustainable Economy, 2020, vol. 12, issue 1, 25-43

Abstract: This study investigates the long run relationship between government expenditure and the GDP in the State of Qatar with a focus on the non-mining and quarrying GDP during the period 1980-2017 using the nonlinear autoregressive distributed lag (NARDL) model. The NARDL model results show an asymmetric impact of government expenditure fluctuations as the increase in both government current and capital expenditures leads to a positive and significant effect on the Qatari's non-mining GDP, whereas the decrease in both types of government expenditure does not significantly affect the non-mining and quarrying GDP. This leads us to conclude that the non-mining and quarrying GDP is unresponsive to government budget cuts. The previous result should encourage policymakers to make bold budget cut decisions, when needed, without being afraid of the potential negative effects on non-mining and quarrying GDP.

Keywords: government expenditure; GDP; nonlinear autoregressive distributed lag; NARDL; fiscal policy; Qatar. (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijsuse:v:12:y:2020:i:1:p:25-43

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