Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought
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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. 2018/133
Subject:
Capital spending Current spending Expenditure Fiscal consolidation Fiscal multipliers Fiscal policy
English
Publication Date:
June 13, 2018
ISBN/ISSN:
9781484361573/1018-5941
Stock No:
WPIEA2018133
Pages:
27
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