We show that the correct experiment to evaluate the effects of a fiscal adjustment is the simulation of a multi year fiscal plan rather than of individual fiscal shocks. Simulation of fiscal plans adopted by 16 OECD countries over a 30-year period supports the hypothesis that the effects of...

“A long-standing economic policy goal of the oil-dependent states of the Gulf Cooperation Council is to increase economic diversification. Over the last decades, GCC governments fostered the development of non-oil economies through large-scale public investments in the stocks of human and...