European Parliament Library

The future of economic development in the Gulf Cooperation Council states, evidence-based policy analysis, Weshah Razzak

The future of economic development in the Gulf Cooperation Council states, evidence-based policy analysis, Weshah Razzak
Bibliography note
Includes bibliographical references and index
index present
Literary Form
non fiction
Main title
The future of economic development in the Gulf Cooperation Council states
Nature of contents
Responsibility statement
Weshah Razzak
Series statement
Routledge Studies in the Modern World Economy
Sub title
evidence-based policy analysis
"The Gulf Cooperation Council (GCC) countries own 30 percent of the world's proven oil reserves and largely depend on oil for their income. Yet, the GCC faces serious challenges. The global demand for oil is expected to continue declining and the average long-run oil price could become lower than its historical average in the future. This book is a research-based, structural macroeconomic analysis, providing evidence-based and future-facing, policy recommendations for GCC governments. First, it analyzes historical data to explain the macroeconomic performance and economic policies of the GCC countries from 1970 to 2019. Then it presents ten-year dynamic stochastic projections from 2020 to 2030. The book examines debt sustainability and optimal fiscal policies, i.e., government spending and taxation. It also analyses structural issues such as savings and productivity, and from an institutional perspective, taking into account education, the labor market, and pension funds, as well as other factors that have a close effect on economic performance. The book is comprehensive and thorough, it relies on extensive econometric analyses, including rigorous time series analysis. The author uses both calibration of theoretical models and estimation, facilitating projections for the next decade of key economic variables under different policy scenarios. The book also assesses what the future of the GCC economies will look like if climate change and the COVID-19 pandemic continue to, adversely, affect oil supply and demand, and the price of oil, given their current policies and institutions. As well as scholars and researchers of economics and finance, the book will engage policymakers in central banks, treasury departments, planning councils, research institutes and think tanks"--, Provided by publisher
Table Of Contents
Cover -- Half Title -- Series -- Title -- Copyright -- Contents -- List of Figures -- List of Tables -- Preface -- 1 Introduction -- 2 Some Stylized Facts -- Oil Revenues Dominate -- Large Shares of Services -- Inefficiency -- Declining Marginal Productivity of Labor and Capital -- Real Depreciation of the Currency -- High Oil Rent -- Small Shares of Agriculture -- Oil Prices, Domestic Prices, and GDP Highly Correlated -- Revenues and Oil Prices Highly Correlated -- High Oil Breakeven Prices -- Government Expenditures and Oil Prices Highly Correlated -- Savings and Oil Prices Highly Correlated -- Private Investments, Private Capital Stock, and Oil Prices Correlated -- Net Exports and Oil Prices Highly Correlated -- External Debt and Oil Prices Negatively Correlated -- Young Population -- High Literacy Rates, Low-Quality Human Capital, and High Female Achievements -- Very Large Foreign Labor Force -- High Youth Unemployment Rates -- Symmetrical Exogenous Shocks -- Monetary Policy Not Independent -- Absolute Monarchies -- 3 The Oil Dependency Dilemma -- Estimating the Share of Oil in Real Output -- Oil Production - Global Oil Consumption Relationship in the Long Run -- The Short-Run Dynamic Relationship and Stress Tests -- Technical Appendix 3.1: The VAR -- Technical Appendix 3.2: The Solver -- Appendix 3.3: The Estimated SVARs -- 4 The External Debt -- The Debt Stylized Facts -- Economic Theories -- Computing the Fiscal Adjustment Needed to Achieve a Sustainable Debt Target -- Appendix 4.1: U.S. Debt Uncorrelated With Real Macroeconomic Variables -- Technical Appendix 4.2: Sustainable Debt -- 5 Is the Level of Government Spending Optimal? -- The Growth Model -- The Empirical Results of Estimating the Growth Equation -- The Current Account Equation -- Appendix 5.1: Government Spending Does Not Crowd Out Private Investments6 Can Taxes Resolve the Economic Problems? -- The Model -- Empirical Evidence -- Appendix 6.1: The Estimated SVAR Without Income Tax -- 7 Savings, Productivity, and Other Structural Issues -- A Case for Personal "Household" Saving -- Productivity -- Other Research Issues Pertinent to Saving and Productivity -- 8 Final Remarks -- References -- Index