Economic Growth and Government Spending in Saudi Arabia: an Empirical Investigation
International Monetary Fund
Download Document| Date Published | 2014 |
| Version | |
| Primary Author | Saad A. Alshahrani |
| Other Authors | Ali J. Alsadiq |
| Theme | Consumer Protection / Mandatory Disclosure |
| Country | Saudi Arabia |
Abstract
This paper empirically examines the effects of different types of government expenditures, on economic growth in Saudi Arabia. We use different econometric techniques to estimate the short- and long-run effects of these expenditures on growth and employ annual data over the period 1969-2010. Our findings indicate that while private domestic and public investments, as well as healthcare expenditure, stimulate growth in the long-run, openness to trade and spending in the housing sector can also boost short-run production. These findings draw some policy implications for Saudi policymakers on maximizing the returns of the government spending on economic growth.