Inflation Differentials in the GCC; Does the Oil Cycle Matter?
Oral Williams and
Kamiar Mohaddes ()
No 2011/294, IMF Working Papers from International Monetary Fund
This paper uses a pairwise approach to investigate the main factors that have been driving inflation differentials in the Gulf Cooperation Council (GCC) region for the past two decades. The results suggest that inflation differentials in the GCC are largely influenced by the oil cycle, mainly through the credit and fiscal channels. This implies that closer coordination of fiscal policies will be key for facilitating the closer integration of the GCC economies and ahead of the move to a monetary union. The results also indicate that after controlling for cyclical factors, convergence increased even during the recent oil boom.
Keywords: Inflation; Fiscal stance; Nominal effective exchange rate; Consumer price indexes; Credit; WP,inflation differential (search for similar items in EconPapers)
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Journal Article: INFLATION DIFFERENTIALS IN THE GCC: DOES THE OIL CYCLE MATTER? (2013)
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