A Coincident Indicator of the Gulf Cooperation Council (GCC) Business Cycle

Al-Hassan, Abdullah

No 09/73, IMF Working Papers from International Monetary Fund

Abstract: This paper constructs a coincident indicator for the Gulf Cooperation Council (GCC) area business cycle. The resulting coincident indicator provides a reliable measure of the GCC business cycle; over the last decade, the GCC coincident index and the real GDP growth have moved closely together. Since the indicator is constructed using a small number of common factors, the strong correlation between the indicator and real GDP growth points to a high degree of commonality across GCC economies. The timing and direction of movements in macroeconomic variables are characterized with respect to the coincident indicator. Finally, to obtain a meaningful economic interpretation of the latent factors, their behavior is compared to the observed economic variables.

Keywords: Business cycles; Cooperation Council for the Arab States of the Gulf; Monetary unions; Monetary policy; Gross domestic product; Economic growth; Economic models; Cross country analysis (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ara and nep-mac
Date: Written
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