Analysing the impact of selected macroeconomic variables on public expenditure in the United Arab Emirates (UAE)

Analysing the impact of selected macroeconomic variables on public expenditure in the United Arab Emirates (UAE)

<p>The objective of this study is to evaluate the impact of selected macroeconomic</p><p>variables on public expenditure in the UAE during the 1975-2020 period, based on the</p><p>Wagner (1883) law of increasing state activities....

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Main Author: Abulrah, Aldahmani Hamad Mohammed Asad
Format: thesis
Language:eng
Published: 2022
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HB Economic Theory
Online Access:https://ir.upsi.edu.my/detailsg.php?det=9504
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institution Universiti Pendidikan Sultan Idris
collection UPSI Digital Repository
language eng
topic HB Economic Theory
spellingShingle HB Economic Theory
Abulrah, Aldahmani Hamad Mohammed Asad
Analysing the impact of selected macroeconomic variables on public expenditure in the United Arab Emirates (UAE)
description <p>The objective of this study is to evaluate the impact of selected macroeconomic</p><p>variables on public expenditure in the UAE during the 1975-2020 period, based on the</p><p>Wagner (1883) law of increasing state activities. The study employs several estimation</p><p>techniques including the Gregory-Hansen cointegration approach, Autoregressive</p><p>Distributed Lag (ARDL) bounds testing technique, the Canonical Cointegrating</p><p>Regression (CCR), Fully Modified Ordinary Least Squares (FMOLS) estimators, the</p><p>Non-linear ARDL (NARDL) method, and the Toda-Yamamoto causality procedure.</p><p>The results of the cointegration tests demonstrate the presence of a long-term</p><p>relationship between public expenditure and the selected variables. Further, the results</p><p>of the different estimation techniques illustrate that oil price, tax burden, fiscal deficit,</p><p>outward flow of money and FDI, and interest rate influence the level of public</p><p>expenditure significantly both in the short-term and the long-term. Moreover, adopting</p><p>the NARDL method, the results suggest that interest rate has an asymmetric effect on</p><p>public expenditure, with positive and negative shocks influence public expenditure</p><p>level differently. Following the Kuznets hypothesis framework, the results illustrate a</p><p>significant inverted U-shaped association between fiscal deficit and government</p><p>expenditure. This suggests that an increase in fiscal deficit is associated with a rise in</p><p>public expenditure till fiscal deficit attains a peak, and then a decline in public</p><p>expenditure over and above the peak-point. Furthermore, the Toda-Yamamoto causality</p><p>test results indicate a two-way causality from public expenditure to fiscal deficit (and</p><p>oil price); a one-way causality running from outflow of money (and outward flow of</p><p>FDI) to public expenditure; and a unidirectional causality from public expenditure to</p><p>tax burden. The study recommends actions aimed at diversifying the UAEs public</p><p>revenue, strict monitor of tax collection and blockage of tax leakages, reduction of fiscal</p><p>deficit, elimination of unofficial remittance flows, promotions of investor-friendly trade</p><p>policies, and the stabilisation of the interest.</p>
format thesis
qualification_name
qualification_level Doctorate
author Abulrah, Aldahmani Hamad Mohammed Asad
author_facet Abulrah, Aldahmani Hamad Mohammed Asad
author_sort Abulrah, Aldahmani Hamad Mohammed Asad
title Analysing the impact of selected macroeconomic variables on public expenditure in the United Arab Emirates (UAE)
title_short Analysing the impact of selected macroeconomic variables on public expenditure in the United Arab Emirates (UAE)
title_full Analysing the impact of selected macroeconomic variables on public expenditure in the United Arab Emirates (UAE)
title_fullStr Analysing the impact of selected macroeconomic variables on public expenditure in the United Arab Emirates (UAE)
title_full_unstemmed Analysing the impact of selected macroeconomic variables on public expenditure in the United Arab Emirates (UAE)
title_sort analysing the impact of selected macroeconomic variables on public expenditure in the united arab emirates (uae)
granting_institution Universiti Pendidikan Sultan Idris
granting_department Fakulti Pengurusan dan Ekonomi
publishDate 2022
url https://ir.upsi.edu.my/detailsg.php?det=9504
_version_ 1783730269574922240
spelling oai:ir.upsi.edu.my:95042023-09-14 Analysing the impact of selected macroeconomic variables on public expenditure in the United Arab Emirates (UAE) 2022 Abulrah, Aldahmani Hamad Mohammed Asad HB Economic Theory <p>The objective of this study is to evaluate the impact of selected macroeconomic</p><p>variables on public expenditure in the UAE during the 1975-2020 period, based on the</p><p>Wagner (1883) law of increasing state activities. The study employs several estimation</p><p>techniques including the Gregory-Hansen cointegration approach, Autoregressive</p><p>Distributed Lag (ARDL) bounds testing technique, the Canonical Cointegrating</p><p>Regression (CCR), Fully Modified Ordinary Least Squares (FMOLS) estimators, the</p><p>Non-linear ARDL (NARDL) method, and the Toda-Yamamoto causality procedure.</p><p>The results of the cointegration tests demonstrate the presence of a long-term</p><p>relationship between public expenditure and the selected variables. Further, the results</p><p>of the different estimation techniques illustrate that oil price, tax burden, fiscal deficit,</p><p>outward flow of money and FDI, and interest rate influence the level of public</p><p>expenditure significantly both in the short-term and the long-term. Moreover, adopting</p><p>the NARDL method, the results suggest that interest rate has an asymmetric effect on</p><p>public expenditure, with positive and negative shocks influence public expenditure</p><p>level differently. Following the Kuznets hypothesis framework, the results illustrate a</p><p>significant inverted U-shaped association between fiscal deficit and government</p><p>expenditure. This suggests that an increase in fiscal deficit is associated with a rise in</p><p>public expenditure till fiscal deficit attains a peak, and then a decline in public</p><p>expenditure over and above the peak-point. Furthermore, the Toda-Yamamoto causality</p><p>test results indicate a two-way causality from public expenditure to fiscal deficit (and</p><p>oil price); a one-way causality running from outflow of money (and outward flow of</p><p>FDI) to public expenditure; and a unidirectional causality from public expenditure to</p><p>tax burden. The study recommends actions aimed at diversifying the UAEs public</p><p>revenue, strict monitor of tax collection and blockage of tax leakages, reduction of fiscal</p><p>deficit, elimination of unofficial remittance flows, promotions of investor-friendly trade</p><p>policies, and the stabilisation of the interest.</p> 2022 thesis https://ir.upsi.edu.my/detailsg.php?det=9504 https://ir.upsi.edu.my/detailsg.php?det=9504 text eng closedAccess Doctoral Universiti Pendidikan Sultan Idris Fakulti Pengurusan dan Ekonomi <p>Abbas, S. M., & Abdullah, H. A. (2019). 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