Government Spending and Non-Oil Economic Growth in the UAE

Ibrahim Carole ()
Additional contact information
Ibrahim Carole: Saint Joseph University, Dubai, United Arab Emirates; American University in Dubai, Dubai, United Arab Emirates

Economics and Business, 2019, vol. 33, issue 1, 82-93

Abstract: The present paper studies empirically the relationship between government spending and non-oil economic growth in the UAE for the last four decades by using the vector autoregression (VAR) approach. The findings of the study suggest that the implementation of expansionary policy, through the intensification of current and development public expenditures, induces an increase in the non-oil economic growth during the subsequent periods of the government spending shock. Thus, the implementation of expansionary government spending stimulates the UAE economy, especially during recession periods. The study suggests that policymakers should concentrate their spending on the right projects, as well as on research and development. Moreover, they should channel their transfers and subsidies to the productive sectors, and they should ensure that higher productivity in public institutions is in conjunction with the rise in wages and salaries to achieve sustainable economic growth.

Keywords: Current Expenditures; Development Expenditures; Government Spending; Non-Oil Economic Growth; United Arab Emirates (UAE); Vector Autoregression (VAR) (search for similar items in EconPapers)
JEL-codes: E60 E62 H50 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/eb-2019-0006 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecobus:v:33:y:2019:i:1:p:82-93:n:6

DOI: 10.2478/eb-2019-0006

Access Statistics for this article

Economics and Business is currently edited by Remigijs Počs

More articles in Economics and Business from Sciendo
Bibliographic data for series maintained by Peter Golla ().