Volume 4, Issue 4, August 2015, Page: 99-108
Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013)
Olusi Janet, Department of Economics, Faculty of Social Sciences, Obafemi Awolowo University, Ile-Ife, Nigeria
Dada Matthew Abiodun, Department of Economics, Faculty of Social and Management Sciences, Wellspring University, Benin City, Nigeria
Received: Jun. 23, 2015;       Accepted: Jul. 16, 2015;       Published: Aug. 10, 2015
DOI: 10.11648/j.jwer.20150404.12      View  4524      Downloads  107
Abstract
This study examined the growth effect of fiscal variable specifically government expenditure in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia. The study covered the period 1981 to 2013. The secondary data used for the study were fetched from World Development Indicators (WDIs) 2014 edition and Pen World Tables version 8.1. The variables included in the analysis include GDP, aggregate government expenditure, imports and exports of goods and services all in US dollar. Others include broad money as a percentage of GDP, annual inflation rate, annual growth rate of population and total population. We employed Time Series Econometric techniques of analysis. Long-run equilibrium relationships were found to exist between government expenditure and economic growth in all the three countries. The result also shows that government expenditures have positive and significant effects on economic growth. However, the magnitude of these effects varies across the three countries. This finding therefore called for the support for fiscal space hypothesis in these countries to boost economic growth. We therefore concluded that government expenditure among other variables enhanced economic growth in the oil-rich developing countries of Nigeria, Indonesia and Saudi Arabia during the period under investigation.
Keywords
Fiscal Variables, Oil-rich Developing Countries, Long-run Equilibrium, Economic Growth
To cite this article
Olusi Janet, Dada Matthew Abiodun, Fiscal Variables and Economic Growth in Oil-rich Developing Countries (1981-2013), Journal of World Economic Research. Vol. 4, No. 4, 2015, pp. 99-108. doi: 10.11648/j.jwer.20150404.12
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