On the Optimality of GCC Monetary Union: Asymmetric Shocks Assessments
Atef Saad Alshehry () and
Sarra Ben Slimane
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Atef Saad Alshehry: College of Administrative Sciences, Najaran University, Saudia Arabia
Review of Economics & Finance, 2013, vol. 3, 49-62
Abstract:
The main objective of this paper is to investigate the desirability and the feasibility of establishing a monetary union in GCC countries. The paper assesses the symmetry of the external shocks that the economies are subject to and the degree of synchronization in long run economic activities and in short run business cycle. The paper establishes the following results: (i) In general correlation results of the various shocks indicate that GCC countries are still far forming an optimal currency union given the fact that a large number of correlation¡¯s coefficients are not positive meaning that shocks are asymmetric; (ii) However, decomposition variance results argue well for feasibility of currency union across GCC countries.
Keywords: Monetary Union; GCC countries; convergence criteria; Structural VAR model; Asymmetric shocks (search for similar items in EconPapers)
JEL-codes: C32 E32 F62 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:bap:journl:130105
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