Estimation and Testing of the Fiscal Reaction Function in Selected Arab Countries using the Autoregressive Distributed Lags (ARDL) Approach
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Abstract
The main aim of this paper is to assess the fiscal sustainability in Iraq, Egypt, and Jordan by estimating the fiscal reaction function. To show the extent to which fiscal policy interacts in these countries by taking corrective measures in adjusting the primary balance of the public budget towards developments in the public debt, government spending gap and the output gap. Using the Autoregressive Distributed Lags (ARDL) Approach, the empirical results indicated the response of the fiscal policy in Iraq to the developments that occurred in the levels of public debt, and thus provide evidence of the existence of the fiscal sustainability, but the fiscal policy in Iraq did not take the necessary and countermeasures of the economic cycle. As for Egypt, the results indicated that there is a weak response by the fiscal policy in the face of debt challenges, or that is on the path of fiscal sustainability, but slowly. In Jordan, I concluded that the long-term equilibrium relationship between the primary balance of the public budget and the levels of the public debt has not been achieved, and thus there is no evidence of the Jordanian economy’s progress towards fiscal sustainability.
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اولاً. المصادر العربية:
منشد، حلمي إبراهيم، (2021)، تقييم استدامة الدين العام في العراق... تحليل تجريبي، مجلة الكوت للعلوم الاقتصادية والإدارية، المجلد (13)، العدد (41)، ص: 85-118.
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