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

Author

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  • Ebrahim Eltejaei

    (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.

Suggested Citation

  • Ebrahim Eltejaei, 2018. "Oil, Government’s Budget and Economic Growth: A Dynamic Panel Data Model for Selected Oil Exporting Economies," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 22(3), pages 669-683, Summer.
    • Handle: RePEc:eut:journl:v:22:y:2018:i:3:p:669
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