On the Optimality of GCC Monetary Union: Asymmetric Shocks Assessments
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.
Volume (Year): 3 (2013)
Issue (Month): (February)
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References listed on IDEAS
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- Michael Sturm & Nikolaus Siegfried, 2005. "Regional monetary integration in the member states of the Gulf Cooperation Council," Occasional Paper Series 31, European Central Bank. Full references (including those not matched with items on IDEAS)
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