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

Abdullah Alhassan

No 2009/073, 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: WP; business cycle; time series; money supply (search for similar items in EconPapers)
Pages: 34
Date: 2009-04-01
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Citations: View citations in EconPapers (7)

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