Symmetric oil price shocks and government expenditure-real exchange rate nexus: ARDL and SVAR models for an oil-based economy, 1970–2018

Algaeed, Abdulaziz Hamad

doi:10.1080/23322039.2020.1782076

Cited by 10 publications

(20 citation statements)

References 28 publications

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“…On the other hand, in resource-dependent countries, energy price shocks can severely affect government revenue and spending, while government revenue growth tends to accelerate the expansion of the non-energy sector. 8,10,13,24,25 Farzanegan et al 9 analyzed the dynamic relationship between oil price shocks and key macroeconomic variables in Iran and point out the asymmetric effects and the marginal impact of oil price volatility on real GOVS. 26 analyzed the relationship between oil revenue shocks and GOVS behaviour in Iran using annual data from 1959 to 2007, concluding that government military and security expenditures have a significantly positive effect on oil revenue (or oil price) shocks, while other social expenditures of the Iranian government do not have a significant effect on oil price shocks.…”

Section: Literature Reviewmentioning

confidence: 99%

“…It was also found that a negative energy revenue shock resulting from a reduction in capital spending has a greater impact on GOVS than a positive shock. Based on this study, 7,25 analyzed the impact of oil price shocks on GOVS in Saudi Arabia. The study found a non-linear relationship between oil prices and GOVS, with a statistically significant difference between negative oil price shocks and positive shocks in the long-run.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Therefore, all the variables are integrated into order one I(1). 8,25 Since the specified variables are all smooth series in the first-order difference, it is particularly important to investigate whether there is a cointegration relationship between them. Therefore, we need to construct VAR models and use the AIC and the SIC to determine the maximum lag order of the models.…”

Section: Empirical Analysismentioning

confidence: 99%

“…The high speed of adjustment is justified on the grounds that the volatility of LNG prices affects the total government LNG earnings, and in turn, affects the internal and external demand of goods and services which will impact the economic growth (LNG revenue and non-LNG revenue). 25,36…”

Section: Empirical Analysismentioning

confidence: 99%

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The relationship between LNG price, LNG revenue, non-LNG revenue and government spending in China: An empirical analysis based on the ARDL and SVAR model

Hao

2021

Energy & Environment

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The present paper examines the dynamic relationship between liquefied natural gas (LNG) price, LNG revenue, non-LNG revenue and government spending (GOVS) in China using autoregressive distributed lag (ARDL) and structural vector auto-regressive (SVAR) model. The goal of carrying out ARDL and SVAR together is to consolidate and strengthen the consistency of the results obtained from both approaches. ARDL results show that a positive influence relationship between both short-run and long-run LNG prices, LNG revenue, non-LNG revenue and GOVS, but there was no significant relationship between LNG price and GOVS. The SVAR also substantiates the results of ARDL test and provides further insight which shows that long-run fiscal synchronization hypothesis is evidenced between the LNG revenue and GOVS, while spend-tax hypothesis exists in the long-run between GOVS and non-LNG revenue. It is also evidenced that there is a complementary relationship between LNG revenue and non-LNG revenue, but this complementary role is stronger than the substitution role. Since non-LNG revenue has a greater impact on GOVS in the short-run, and the impact of LNG prices and LNG revenue on GOVS in the long-run increases over time, thus, GOVS mitigates the direct impact of non-LNG revenue to some extent, and that an appropriate allocation of spending in the non-LNG industry will have a positive impact on the development of the market economy supporting the Keynesian and spend-tax hypothesis.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Empirical Analysismentioning

confidence: 99%

Section: Empirical Analysismentioning

confidence: 99%

See 2 more Smart Citations

The relationship between LNG price, LNG revenue, non-LNG revenue and government spending in China: An empirical analysis based on the ARDL and SVAR model

Hao

2021

Energy & Environment

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“…The results show that oil price volatility affects all countries military expenditures except United Arab Emirates. Similarly, Algaeed (2020) revealed the effect of oil price shocks on government expenditures‐real exchange nexus by employing two methodologies at a time like ARDL and SVAR for the period 1970–2018 in Saudi Arabia. Abdel‐Latif et al (2018) explore the association of oil price and health and education expenditures by employing non‐linear ARDL approach and found asymmetric effect of oil price in Saudi Arabian expenditures.…”

Section: Literature Reviewmentioning

confidence: 99%

Does oil price spur public expenditures in Saudi Arabia, Kuwait and United Arab Emirates?

Faheem

Azali

Lee

et al. 2021

Journal of Public Affairs

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The results confirm the existence of asymmetric behaviour of oil price, which is a key factor that fiscal authorities used for the decision about public expenditures. Furthermore, the result reveals that the evidence of the Keynesian hypothesis is observed in United Arab Emirates. While Kuwait fits both theories at a time and also confirms Wagner's law only in Saudi Arabia. Moreover, the results support the spend-and-revenue hypothesis in Saudi Arabia and Kuwait while fiscal neutrality in United Arab Emirates. On the basis of conclusion, the study recommends that the government should re-invest the surplus from oil receipt into other sectors of the economy on a priority basis that will reduce the negative effects of a decline in oil price.

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Space-time dynamics of cargo theft: evidence from São Paulo, Brazil

Aransiola,

Justus,

Ceccato

2023

J Transp Secur

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The objective of this study is to contribute to the growing literature on cargo theft by empirically testing four specific hypotheses of its causes – the space-time dynamics hypothesis, the economic attractiveness hypothesis, the social structure hypothesis, and the deterrence hypothesis. This study investigates the case of the economic core of one of the most severe regions regarding cargo theft worldwide – São Paulo state. As novelty in crime studies, we estimate Autorrregressive Distributed Lag models (ARDL). We found that the number of cargo thefts of a geographic area can be predicted by itself and that of neigbouring areas. This is an unprescendeted empirical evidence that cargo theft time series are autoregressive and cointegrated. Regarding economic attractiveness and social structure, the results are inconclusive. However, police activity reduces cargo theft in the large metropolitan area and inland municipalities of São Paulo state.

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Symmetric oil price shocks and government expenditure-real exchange rate nexus: ARDL and SVAR models for an oil-based economy, 1970–2018

Cited by 10 publications

References 28 publications

The relationship between LNG price, LNG revenue, non-LNG revenue and government spending in China: An empirical analysis based on the ARDL and SVAR model

The relationship between LNG price, LNG revenue, non-LNG revenue and government spending in China: An empirical analysis based on the ARDL and SVAR model

Does oil price spur public expenditures in Saudi Arabia, Kuwait and United Arab Emirates?

Space-time dynamics of cargo theft: evidence from São Paulo, Brazil

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