Record Details

The Synchronization of Financial and Business Cycles in Saudi Arabia

Scholedge International Journal of Management & Development

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Field Value
 
Title The Synchronization of Financial and Business Cycles in Saudi Arabia
 
Creator El-Baz, Osama; Economist, Chamber of Commerce and Industry
 
Subject Economics
Financial Cycles, Business Cycles, BBQ Algorithm, Amplitude, Procyclicality
Economy & Finance
 
Description Financial cycles have become vividly tracked and analyzed by regulatory authorities to avoid the buildup of excessive systemic risks in the financial system that could hamper economic growth. However, fiscal policy usually pays an exclusive attention to business cycles; which might leave fiscal outcomes vulnerable to financial sector dynamics. We investigated financial and business cycles in Saudi Arabia over the period (1970Q1- 2016Q4). The results of the BBQ cycle dating algorithm revealed that the duration of financial upturns (downturns) are longer than that for economic expansions (contractions) in means, also both the amplitude and the slope for upturns (downturns) are higher than those for expansions (contractions) in means. Moreover, financial cycle episodes are more frequent than business cycle episodes. Finally, we found empirical evidence that financial (credit) conditions are crucial for economic stability. Fiscal policy can play an important role in fostering economic growth going forward through the implementation of a countercyclical policy that allows for the accumulation of fiscal buffers and releasing them during periods of an economic slowdown, the setup of early warning systems for business and financial cycles, and the introduction of fiscal rules to limit the scope for a procyclical fiscal stance.
 
Publisher Scholedge R&D Center
 
Contributor —
 
Date 2018-05-16
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
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Format application/pdf
 
Identifier http://www.thescholedge.org/index.php/sijmd/article/view/465
10.19085/journal.sijmd050401
 
Source Scholedge International Journal of Management & Development ISSN 2394-3378; Vol 5, No 4 (2018); 32-47
2394-3378
 
Language eng
 
Relation http://www.thescholedge.org/index.php/sijmd/article/view/465/488
 
Coverage Saudi Arabia
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Rights Copyright (c) 2018 Scholedge International Journal of Management & Development ISSN 2394-3378
http://creativecommons.org/licenses/by-nc/4.0