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The Impact of Government Spending on GDP in a Remitting Country

Author

Listed:
  • Al-Abri, Almukhtar

    (Sultan Qaboos University)

  • Genc, Ismail H.

    (American University in Sharjah)

  • Naufal, George S

    (Texas A&M University)

Abstract

The literature on remittances is large and growing. However, its focus has mainly been on the effects of remittance inflows on the receiving economies. Little has been done on the sending economies. In this paper, we use data from Saudi Arabia, one of the top remitting countries in the world, to identify the impact of government spending on Saudi Arabia's real output considering the role of remittance outflows. The results suggest that remittance outflows have a weak effect, if at all, on government spending, which, in turn, has an insignificant impact on GDP. The paper discusses some policy implications.

Suggested Citation

  • Al-Abri, Almukhtar & Genc, Ismail H. & Naufal, George S, 2018. "The Impact of Government Spending on GDP in a Remitting Country," IZA Discussion Papers 11676, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11676
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    References listed on IDEAS

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    More about this item

    Keywords

    remittances; multipliers; fiscal policy; GCC;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East

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