{
  "title": "Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought",
  "publication": "IMF Working Papers, June 13, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2018/06/13/fiscal-adjustment-in-the-gulf-countries-less-costly-than-previously-thought-45931",
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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 cost",
  "sections": [
    {
      "heading": "Summary findings",
      "content": "- The paper estimates fiscal multipliers for the Gulf Cooperation Council (GCC) countries.\n- Results indicate that GCC fiscal multipliers have declined in recent years, which would make the on-going fiscal consolidation less costly than previously thought.\n- Both capital and current multipliers have declined in recent years.\n- Capital multipliers are larger than current multipliers, implying that reducing (less productive) current spending will help limit the adverse impact of such measures on growth."
    },
    {
      "heading": "Methodology",
      "content": "- Estimation approach: OLS panel fixed effects.\n- Sample: six countries.\n- Sample period: 1990-2016."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Fiscal consolidation in the GCC is likely to be less costly for growth than previously estimated, given the decline in fiscal multipliers.\n- Prioritize reductions in current spending (characterized as less productive) over capital spending to limit adverse growth impacts, since capital multipliers remain larger than current multipliers.\n\n---\n\n Content in this bundle\n\n- Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought, WP/18/133, June 2018\n  - Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought, WP/18/133, June 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought, WP/18/133, June 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/06/13/fiscal-adjustment-in-the-gulf-countries-less-costly-than-previously-thought-45931"
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    "Authors: Armand P Fouejieu, Sergio L. Rodriguez, Sohaib Shahid",
    "Published: June 13, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484361573.001",
    "The paper estimates fiscal multipliers for the Gulf Cooperation Council (GCC) countries.",
    "Results indicate that GCC fiscal multipliers have declined in recent years, which would make the on-going fiscal consolidation less costly than previously thought.",
    "Both capital and current multipliers have declined in recent years.",
    "Capital multipliers are larger than current multipliers, implying that reducing (less productive) current spending will help limit the adverse impact of such measures on growth.",
    "Estimation approach: OLS panel fixed effects.",
    "Sample: six countries.",
    "Sample period: 1990-2016.",
    "Fiscal consolidation in the GCC is likely to be less costly for growth than previously estimated, given the decline in fiscal multipliers.",
    "Prioritize reductions in current spending (characterized as less productive) over capital spending to limit adverse growth impacts, since capital multipliers remain larger than current multipliers.",
    "**Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought, WP/18/133, June 2018**"
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