THE DYNAMIC OF MACROECONOMIC AGGREGATES IN THE UNITED ARAB EMIRATES (UAE): COMPREHENSIVE EMPIRICAL ANALYSIS
Keywords:
Private Consumption, Government Consumption, Private Investment, Government Investment, Total Imports, Non-Oil GDP, Oil and Gas Revenues, Overall GDP.Abstract
The present investigation provides an empirical assessment of the factors shaping the major macroeconomic aggregates in the United Arab Emirates (UAE) across the period 1972–2025. Employing Ordinary Least Squares (OLS) time-series estimations, the analysis examines the dynamics of private consumption, public consumption, private investment, public investment, and aggregate imports. The empirical specifications integrate core economic determinants, notably Non-Oil GDP, Oil and Gas Revenues, and overall GDP, in `conjunction with lagged dependent terms and a binary variable reflecting the structural disruption associated with the 2008 Global Financial Crisis. The empirical evidence indicates pronounced inertia within the macroeconomic aggregates, confirming their dependence on past values. Oil-derived revenues exhibit a statistically significant and positive effect on government expenditure, underscoring the fiscal sensitivity to hydrocarbon income. Furthermore, overall GDP emerges as a dominant explanatory factor for both investment behavior and the trajectory of imports. Collectively, these outcomes generate important policy implications for resource-reliant economies, highlighting the imperative for prudent fiscal management, economic diversification beyond hydrocarbons, and well-calibrated investment strategies to strengthen long-term economic stability.