{
  "title": "How Strong are Fiscal Multipliers in the GCC?",
  "publication": "IMF Working Papers, March 1, 2011",
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  "summary": "The effectiveness of fiscal policy in smoothing the impact of shocks depends critically on the size of fiscal multipliers.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The paper examines the size of fiscal multipliers in the GCC countries and the effectiveness of fiscal policy in smoothing the impact of shocks.\n- Focus is on government spending because tax revenues are small.\n- Fiscal multipliers in the GCC are evaluated in the context of: absence of an independent monetary policy, and potential leakages through remittances and imports."
    },
    {
      "heading": "Key findings",
      "content": "- Long-run multiplier estimates for current expenditure vary in the \"0.3-0.7\" range.\n- Long-run multiplier estimates for capital spending vary in the \"0.6-1.1\" range.\n- These estimates depend on the particular specification and estimation method chosen.\n- The estimated ranges \"fall within the range of fiscal multiplier estimates in the literature for non-oil emerging markets.\""
    },
    {
      "heading": "Methodology and focus",
      "content": "- The paper provides estimates using a variety of models (specific model names and technical details are in the full paper).\n- The empirical focus is on government spending rather than taxes, reflecting the small role of tax revenues in GCC fiscal structures."
    },
    {
      "heading": "Policy implications",
      "content": "- The effectiveness of fiscal policy in cushioning large terms of trade shocks is linked to the size of fiscal multipliers; thus understanding multiplier magnitudes is critical for policy design in the GCC.\n- Leakages through remittances and imports may weaken fiscal multipliers, which policymakers should account for when designing fiscal interventions in the absence of independent monetary policy.\n\n---\n\n Content in this bundle\n\n- wp1161\n  - wp1161 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1161 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/how-strong-are-fiscal-multipliers-in-the-gcc-24715"
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    "Authors: Raphael A Espinoza, Abdelhak S Senhadji",
    "Published: March 1, 2011",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781455221059.001",
    "The paper examines the size of fiscal multipliers in the GCC countries and the effectiveness of fiscal policy in smoothing the impact of shocks.",
    "Focus is on government spending because tax revenues are small.",
    "Fiscal multipliers in the GCC are evaluated in the context of: absence of an independent monetary policy, and potential leakages through remittances and imports.",
    "Long-run multiplier estimates for current expenditure vary in the \"0.3-0.7\" range.",
    "Long-run multiplier estimates for capital spending vary in the \"0.6-1.1\" range.",
    "These estimates depend on the particular specification and estimation method chosen.",
    "The estimated ranges \"fall within the range of fiscal multiplier estimates in the literature for non-oil emerging markets.\"",
    "The paper provides estimates using a variety of models (specific model names and technical details are in the full paper).",
    "The empirical focus is on government spending rather than taxes, reflecting the small role of tax revenues in GCC fiscal structures.",
    "The effectiveness of fiscal policy in cushioning large terms of trade shocks is linked to the size of fiscal multipliers; thus understanding multiplier magnitudes is critical for policy design in the GCC.",
    "Leakages through remittances and imports may weaken fiscal multipliers, which policymakers should account for when designing fiscal interventions in the absence of independent monetary policy.",
    "**_wp1161**"
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