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Fiscal Adjustment in the Gulf Countries: Less Costly than Previously Thought
Author:
Mr. Armand P Fouejieu
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https://orcid.org/0000-0002-2527-4601
,
Mr. Sergio L. Rodriguez
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, and
Mr. Sohaib Shahid
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Series:
IMF Working Papers
Volume/Issue:
Volume 2018: Issue 133
Language:
English
Publication Date:
13 Jun 2018
DOI:
https://doi.org/10.5089/9781484361573.001
ISBN:
9781484361573
ISSN:
1018-5941
Pages:
27
Keywords:
WP; government spending; GDP; multiplier; Fiscal Policy; Fiscal Multiplier; GCC; oil GDP; GCC country; spending multiplier; tourism expenditure; spending growth; Capital spending; Current spending; Fiscal multipliers; Fiscal consolidation; Global
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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.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund