General-equilibrium analysis of government expenditures in an oil-exporting country: the case of Kuwait

Thesis/Dissertation · Tue Jan 01 04:00:00 EST 1985

OSTI ID:6268491

Alsabah, M S.S.

The growing literature over the past few years regarding the adverse effect of an oil boom on oil-exporting countries, i.e., Dutch Disease, is the main motivation behind this study. The nature of the disease and the possible cure available to policy makers in an oil-exporting developing country like Kuwait is what this dissertation is set out to explore. The author constructs and implements a multi-sector Walrasian general equilibrium model to investigate the short- and long-term effects of an expansion in oil revenues on the growth and structure of the Kuwaiti economy for the period 1979 to 1989. In the short run, he found the Dutch Disease to be an inevitable consequence of an expansion in oil revenues, irrespective of the methods by which the government injects these revenues into the economy. In the long run, however, the composition of government domestic expenditures would be the principal determinant of relative sectoral growth of the Kuwait economy. In other words, the long-term systematic decline in the relative position of tradable sectors is not an inevitable consequence of a large inflow of oil revenues, but rather a choice that has to be made by policy-makers.

• Research Organization: Harvard Univ., Boston, MA (USA)
• OSTI ID: 6268491
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294002 -- Energy Planning & Policy-- Petroleum
ASIA
COST
DECISION MAKING
ECONOMIC GROWTH
ECONOMIC IMPACT
ENERGY SOURCES
EXPORTS
FOSSIL FUELS
FUELS
KUWAIT
MIDDLE EAST
NATIONAL GOVERNMENT
OIL-EXPORTING COUNTRIES
PETROLEUM