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

Author/Editor:

Armand Fouejieu ; Sergio Rodriguez ; Sohaib Shahid

Publication Date:

June 13, 2018

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

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.

Series:

Working Paper No. 18/133

Subject:

English

Publication Date:

June 13, 2018

ISBN/ISSN:

9781484361573/1018-5941

Stock No:

WPIEA2018133

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

27

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