ESTIMATING THE IMPACT OF THE MACROECONOMIC INDICATORS SHOCKS ON KSA NON-OIL EXPORTS 1970-2019: (SVAR) ANALYSIS AND (NARDL) ASSESSMENT

Hassan Tawakol A Fadol

doi:10.32479/ijefi.10420

Abstract

Studies employ various methods to explain the presence of the Impact of the macroeconomic indicators shocks on non-oil exports, including applying models to the case of emerging economies. However, the non-oil exports have different determinants in some countries. To revisit this puzzle, we analyzed the Estimating the Impact of the macroeconomic indicators shocks on KSA non-oil exports: (SVAR) analysis and (NARDL) assessment. Short run and long run shocks between the selected variables and result's is checked through the SVAR, NARDL model. Our results confirm co-integration, positive shocks results show that macroeconomic indicators shocks have significantly influence on non-oil exports. The empirical results based on SVAR, NARDL most relationships are weak and negative except for non-oil exports, monetary reserves. Here we can observe the elasticities or contemporaneous relations between variables. We see negative relations between non-oil exports and GDP, Exchange Rate and inflation in the same interval, while an increase in non-oil exports has nearly no impact on both GDP, Exchange Rate and inflation. The results provide statistically, economics supported evidence that can guide policy makers regarding action priorities and identify other opportunities to facilitate reducing the Impact of the macroeconomic indicators shocks on non-oil exports in Saudi Arabia.Keywords: Non-Oil Exports, Inflation Rate, Monetary Reserves, GDP, SVAR, NARDLJEL Classifications: E31, E52DOI: https://doi.org/10.32479/ijefi.10420

Highlights

Non-oil exports in Saudi Arabia decreased to 47050 Million SAR in the first quarter of 2020 from 52787 Million SAR in the fourth quarter of 2019
This research substantially increases the body of knowledge regarding the validity of Dependence on export diversification as a mechanism to address structural imbalances in the economy. It is against this background that this study examined the Estimating the Impact of the macroeconomic indicators shocks on KSA non-oil exports between 1970 and 2019; while addressing the following issues: (1)
The model constructed using the (SVAR, nonlinear ARDL model (NARDL)) for measuring Estimating the Impact of the macroeconomic indicators shocks on KSA non-oil exports. non-oil exports can generate effects on the level and volatility of inflation, can influence the level of the gross domestic product (GDP), can And increase the strength of monetary reserves, exchange rate stability

Summary

INTRODUCTION

Non-oil exports in Saudi Arabia decreased to 47050 Million SAR in the first quarter of 2020 from 52787 Million SAR in the fourth quarter of 2019. This study examined the Impact of the macroeconomic indicators shocks like (real effective exchange rate, and international reserves and GDP) on KSA non-oil exports from 1970 to 2019: (SVAR) analysis and (NARDL) assessment. This research substantially increases the body of knowledge regarding the validity of Dependence on export diversification as a mechanism to address structural imbalances in the economy It is against this background that this study examined the Estimating the Impact of the macroeconomic indicators shocks on KSA non-oil exports between 1970 and 2019; while addressing the following issues: (1). The model constructed using the (SVAR, NARDL) for measuring Estimating the Impact of the macroeconomic indicators shocks on KSA non-oil exports. It is a fact that of some economic variables may not adjust instantaneously to newly available information

LITERATURE REVIEW

EMPIRICAL RESULTS AND DISCUSSION

CONCLUSION