The Oil, Government’s Budget and Economic Growth: A Dynamic Panel Data Model for Selected Oil Exporting Economies

Author

Department of Economics and Management, Institute for Humanities and Cultural Studies, Tehran, Iran

Abstract

Recognition of economic growth determinants is one of the most important concerns for economists. In the oil exporting countries oil revenues play a significant role for the economy alongside with other economic growth determinants. This paper attempts to investigate the role of oil in selected oil-revenue dependent economies. Since oil revenue goes directly to public treasury and is expended by the government, government’s management for this revenue would be crucial in the economy. This paper utilizes a proposed index, as Government Savings over Oil Revenues (GSOR). The higher level of GSOR suggests that governments finance their expenses by non-oil revenues more than oil revenues, which is a better situation. Findings from a Dynamic Panel Data model and GMM estimation method, on 12 oil exporting economies during 1990-2013, show that GSOR has significant positive effect on real GDP growth.

Keywords

References

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Iranian Economic Review
Volume 22, Issue 3 - Serial Number 3
September 2018
Pages 667-681

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