ROLE OF OIL PRICE IN FISCAL CYCLICALITY IN SAUDI ARABIA

Testing cyclicality of fiscal policy is pertinent in any country to observe its type with the business cycle. In oil abundant economy, price and trade openness may also play a role determining cyclicality. This research probes economic growth, openness, on government consumption growth verify Saudi Arabia from 1971 2018. The cointegration test Pesaran (2001) utilized hypothesis augmented critical bound statistics developed by Kripfganz Schneider (2019). We corroborate long short-run relationships model Arabia. Further, procyclicality proved run countercyclicality corroborated short one-year lag effect. Moreover, revenue has positive effect expenditure. However, prices could not affect spending. Keywords: Fiscal Cyclicality, price, consumption, growthJEL Classifications: E62, Q41, P33, O43 DOI: https://doi.org/10.32479/ijeep.10700