Abstract
AbstractWe explore the fiscal sustainability in the six Gulf Cooperation Council (GCC) countries over the period 1990–2017. Panel unit root tests in presence of cross-sectional dependence for government revenues, expenditures, the primary balance, and debt reach mixed results. However, cointegration tests reveal that a long-run relationship exists between government revenues and expenditures, while the relationship between government primary deficit and debt is controversial. Panel estimates of the cointegrating relationship indicate that Saudi Arabia is in a condition of risk, having to keep the debt under control. Yet, Bahrain and Qatar seem to face the toughest challenges. The results of causality tests support the hypothesis of fiscal synchronization, implying that the GCC governments take decisions on their revenues and expenditures simultaneously.
Funder
Università degli Studi Roma Tre
Publisher
Springer Science and Business Media LLC
Subject
Political Science and International Relations,Sociology and Political Science,Economics and Econometrics
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