ON THE OPTIMALITY OF A GCC MONETARY UNION: STRUCTURAL VAR, COMMON TRENDS AND COMMON CYCLES EVIDENCE

Suleiman Abu-Bader () and Aamer Abu-Qarn ()

No 611, Working Papers from Ben-Gurion University of the Negev, Department of Economics

Abstract: This paper examines the suitability of the proposed monetary union among the members of the Gulf Cooperation Council (GCC). To do so, we identify the underlying structural shocks that these economies are subject to and assess the extent to which the shocks are symmetric. Additionally, we test for common trends and common business cycles among the GCC economies. We find that while the transitory demand shocks are typically symmetric, the permanent supply shocks are asymmetric. Furthermore, we do not find synchronous long-run and short-run movements in output. Despite the progress that has been made in terms of integration, our findings indicate that the conditions for forming a GCC monetary union have not as yet been met.

Keywords: Gulf Cooperation Council; GCC; optimal monetary union; cointegration; common cycles; structural VAR (search for similar items in EconPapers)
JEL-codes: F33 F36 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://in.bgu.ac.il/en/humsos/Econ/Workingpapers/0611.pdf (application/pdf)

Related works:
Journal Article: On the Optimality of a GCC Monetary Union: Structural VAR, Common Trends, and Common Cycles Evidence (2008)
Working Paper: On the optimality of a GCC Monetary Union: Structural VAR, Common Trends and Common Cycles Evidence (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bgu:wpaper:0611

Access Statistics for this paper

More papers in Working Papers from Ben-Gurion University of the Negev, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Aamer Abu-Qarn ().