Structural model for the Saudi Arabian economy: a monetary approach

Thesis/Dissertation · Thu Jan 01 04:00:00 EST 1987

OSTI ID:6374889

Al-Hajji, M A

In an attempt to quantify the sensitivity of the major macroeconomic variables of the Saudi Arabian economy with respect to (i) monetary and fiscal actions, (ii) the price and quantity of oil exports, and (iii) the price of imports variable, this study employs the monetary approach in constructing a macroeconomic model for the Saudi economy. This macroeconomic model, estimated for 1968-1984, proved to be stable since the historical dynamic simulation of the model for the estimation period resulted in simulated series that closely follow their corresponding actual series. Using this model, the multiplier analysis implies that fiscal policy is far more effective than monetary policy. Furthermore, the multiplier analysis suggests that due to changes in the price and quantity of oil exports, the monetary base is subject to feedback effects from the foreign and government sectors. Finally, using the model, the levels of major macroeconomic variables were forecasted for the period 1985-1995. Based on three scenarios related to the price and quantity of oil exports, findings indicate that, with implementation of fiscal policy, the economy will adjust to the adverse effects of the sharp decline in the price of oil in 1986-1987 and conditions suitable for a growing economy can be created.

• Research Organization: Colorado Univ., Boulder (USA)
• OSTI ID: 6374889
• 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
ECONOMETRICS
ECONOMIC POLICY
ECONOMICS
ECONOMY
ENERGY SOURCES
EXPORTS
FORECASTING
FOSSIL FUELS
FUELS
GOVERNMENT POLICIES
MATHEMATICAL MODELS
PETROLEUM
PRICES
SAUDI ARABIA