Economic Growth and Government Spending in Saudi Arabia: an Empirical Investigation

Author/Editor:

Saad A. Alshahrani ; Ali J Al-Sadiq

Publication Date:

January 13, 2014

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper empirically examines the effects of different types of government expenditures, on economic growth in Saudi Arabia. We use different econometric techniques to estimate the short- and long-run effects of these expenditures on growth and employ annual data over the period 1969-2010. Our findings indicate that while private domestic and public investments, as well as healthcare expenditure, stimulate growth in the long-run, openness to trade and spending in the housing sector can also boost short-run production. These findings draw some policy implications for Saudi policymakers on maximizing the returns of the government spending on economic growth.

Series:

Working Paper No. 2014/003

Subject:

Capital spending Current spending Expenditure Health care spending Total expenditures

English

Publication Date:

January 13, 2014

ISBN/ISSN:

9781484348796/1018-5941

Stock No:

WPIEA2014003

Pages:

26

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