Testing the Relationship Between Government Spending and Revenue [electronic resource] : Evidence From GCC Countries, Wang, Qing.
- Washington, D.C. : International Monetary Fund, 2002.
- IMF eLibrary
IMF Working Papers; Working Paper No. 02/201.
IMF Working Papers; Working Paper No. 02/201
- Government document
1 online resource (27 p.)
- Local subjects:
- Budget constraint.
Central government fiscal.
Composition of expenditure.
Medium-term expenditure framework.
Public expenditure decisions.
Public Expenditures, Investment, and Finance.
Asia including Middle East.
- The paper examines the direction of causality between total government expenditure and revenue in oil-dependent GCC countries by utilizing a cointegration and error-correction modeling framework, and by calculating a variance decomposition analysis. In addition, it presents impulse responses to shed light on the dynamic relation of expenditure to a revenue shock. The results confirm expectations that government spending follows oil revenue, suggesting a pro-cyclical expenditure policy to variations in oil revenue. To make budget expenditure less driven by revenue availability, the authorities could resort to a medium-term expenditure framework, so that expenditures can be planned and insulated from volatile short-term revenue availability.
- Description based on print version record.
- Fasano-Filho, Ugo.
- Other format:
- Print Version:
- Publisher Number:
- Access Restriction:
- Restricted for use by site license.
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