Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought

Armand Fouejieu, Sergio Rodriguez and Sohaib Shahid

No 2018/133, IMF Working Papers from International Monetary Fund

Abstract: This paper estimates fiscal multipliers for the Gulf Cooperation Council (GCC) countries. Using OLS panel fixed effects on a sample of six countries from 1990-2016, results indicate that GCC fiscal multipliers have declined in recent years which would make the on-going fiscal consolidation less costly than previously thought. Though both capital and current multipliers have declined in recent years, capital multipliers are larger than current multipliers, which implies that reducing (less productive) current spending will help limit the adverse impact of such measures on growth.

Keywords: WP; government spending; GDP; multiplier; Fiscal Policy; Fiscal Multiplier; GCC; oil GDP; GCC country; spending multiplier; tourism expenditure; spending growth; Capital spending; Current spending; Fiscal multipliers; Fiscal consolidation; Global (search for similar items in EconPapers)
Pages: 27
Date: 2018-06-13
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Citations: View citations in EconPapers (1)

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