External Linkages and Policy Constraints in Saudi Arabia / Niklas Westelius.

Format:

Book

Government document

Author/Creator:

Westelius, Niklas.

Series:

IMF Working Papers; Working Paper ; No. 2013/059

IMF Working Papers

Language:

English

Subjects (All):

Saudi Arabia--Economic policy.

Saudi Arabia.

Saudi Arabia--Economic conditions.

Saudi Arabia--Foreign economic relations.

Physical Description:

1 online resource (32 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2013.

Language Note:

English

Summary:

The constraints that external linkages impose on domestic policy choices in Saudi Arabia have continuously evolved over the past four decades. This paper argues that two major ongoing developments in particular have affected and will continue to affect policy trade-offs. First, growing oil needs of emerging market economies (EMEs), and specifically those of developing Asia, have strengthened economic links between the Far East and Saudi Arabia. Second, financial sector development in Saudi Arabia has gradually strengthened the monetary transmission mechanism. The former implies the increased importance of developing Asia’s growth cycle for the Saudi economy, while the latter suggests greater influence of U.S. monetary policy on the non-oil economy through the peg to the U.S dollar. As a result, divergence between the growth cycles in developing Asia and the United States has the potential to increasingly generate tension between policy objectives in Saudi Arabia.

Contents:

Cover; Contents; I. Introduction; II. External Linkages; A. Trade in Goods and Services; B. Labor Flows; C. Capital Flows; D. Evolution of External Linkages; III. Policy Objectives; Figures; 1. Evolution of External Linkages; A. Development Strategy; B. Monetary and Exchange Rate Policy; C. Fiscal Policy; D. Oil Production and Pricing Policies; 2. The Importance of U.S. Monetary Policy and Oil Revenues for Domestic; IV. Empirical Analyses of External Linkages and Policy Constraints; Tables; 1. Main External Factors Influencing the Saudi Economy

A. Business Cycle Correlations and Global Oil Prices3. Business Cycle Correlations, 1980-2010; B. Oil Shocks and Business Cycle Dynamics; 2. Quantity and Price Changes in past; 4. Oil prices and Crude Oil Consumption in China; C. The Time-Consistency Problem and Counter-Cyclical Fiscal Policy; 5. Discretionary Fiscal Policy and Oil Revenues, 1996-2010; 6. Smoothing Fiscal Spending against Volatile Oil Revenues; D. Financial Deepening and the Monetary Transmission Mechanism; 7. Measures of Financial Deepening, 1969-2010; 3. Granger Causality Test for Real Credit and Non-Oil GDP

8. Impulse Responses from the Real Credit/Non-Oil GDP VAR4. Variance Decomposition; V. Conclusion; 5. The Impact of LIBOR on Credit and Inflation; References

Notes:

Description based upon print version of record.

Includes bibliographical references.

Description based on online resource; title from PDF title page (ebrary, viewed September 26, 2014).

ISBN:

9781475562996

1475562993

9781475598575

1475598572

9781299395497

129939549X

9781475559477

147555947X