An Empirical Evaluation of Consumption Behaviour in Oil Societies: The Case of Kuwait

Theories of consumption function have been tested for many developed and underdeveloped economies with grouped data sets. No empirical work has been done to confirm or disconfirm these theories in the oil-rich economies of the Middle East. This paper applies Kuwait's rich micro data of the 1972-73 budget survey results to the principal consumption models - the Keynesian Model, the Kaldor Hypothesis, the Friedman Permanent-Income Model and the Life-Cycle Hypothesis. The results of this empirical investigation disconfirm the validity of the strict version of the Permanent-income Hypothesis in favour of the Keynesian and the looser version of the Permanent-Income Hypotheses. The Kaldor model is not strictly applicable and the saving behaviour of Kuwaiti households seems to give support to the Life-Cycle Hypothesis

Export diversification and economic growth in Kuwait: evidence from time series and field survey analyses

This study examines whether export diversification can foster sustained economic growth in Kuwait, using time series analysis for the period 1980–2019 and a field survey of one hundred Kuwait business leaders engaged in import and export of goods and services. The time series analysis reveals that there is no causality between export diversification and economic growth in the short-run. However, an indirect causality runs from export diversification to economic growth, and vice versa, via imports. In the long-run, no causality runs from export diversification to economic growth, but economic growth does cause export diversification. The field survey results indicate that there is a consensus among Kuwaiti CEOs that there are positive spillover effects from exports and imports to producers of local goods and services, and that imports are conductive to economic diversification