Determinants of Inflation in GCC
Inflationary pressures have heightened in the oil-rich Gulf Cooperation Council (GCC) since 2003. This paper studies determinants of inflation in GCC, using an empirical model that includes domestic and external factors. Inflation in major trading partners appears to be the most relevant foreign factor. In addition, oil revenues have reinforced inflationary pressures through growth of credit and aggregate spending. In the short-run, binding capacity constraints also explain higher inflation given increased government spending. Nonetheless, by targeting supply-side bottlenecks, the increase in government spending is easing capacity constraints and will ultimately help to moderate price inflation.
|Date of creation:||01 Apr 2009|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Romer, 1991.
"Openness and Inflation: Theory and Evidence,"
NBER Working Papers
3936, National Bureau of Economic Research, Inc.
- Bonato Leo, 2008.
"Money and Inflation in the Islamic Republic of Iran,"
Review of Middle East Economics and Finance,
De Gruyter, vol. 4(1), pages 41-58, January.
- Leo Bonato, 2007. "Money and Inflation in the Islamic Republic of Iran," IMF Working Papers 07/119, International Monetary Fund.
- Juselius, Katarina, 1992. "Domestic and foreign effects on prices in an open economy: The case of Denmark," Journal of Policy Modeling, Elsevier, vol. 14(4), pages 401-428, August.
- C. John McDermott & David T. Coe, 1996.
"Does the Gap Model Work in Asia?,"
IMF Working Papers
96/69, International Monetary Fund.
- Mame Astou Diouf, 2007. "Modeling Inflation for Mali," IMF Working Papers 07/295, International Monetary Fund.
- Altissimo, Filippo & Benigno, Pierpaolo & Rodriguez Palenzuela, Diego, 2005.
"Long-Run Determinants of Inflation Differentials in a Monetary Union,"
CEPR Discussion Papers
5149, C.E.P.R. Discussion Papers.
- Filippo Altissimo & Pierpaolo Benigno & Diego Rodriguez Palenzuela, 2005. "Long-Run Determinants of Inflation Differentials in a Monetary Union," NBER Working Papers 11473, National Bureau of Economic Research, Inc.
- Calista Cheung, 2009. "Are Commodity Prices Useful Leading Indicators of Inflation?," Discussion Papers 09-5, Bank of Canada.
- Marta Campillo & Jeffrey A. Miron, 1997.
"Why Does Inflation Differ across Countries?,"
in: Reducing Inflation: Motivation and Strategy, pages 335-362
National Bureau of Economic Research, Inc.
- Mohsin S. Khan & Axel Schimmelpfennig, 2006.
"Inflation in Pakistan: Money or Wheat?,"
SBP Research Bulletin,
State Bank of Pakistan, Research Department, vol. 2, pages 213-234..
- Hesham Alogeel & Maher Hasan, 2008. "Understanding the Inflationary Process in the GCC Region; The Case of Saudi Arabia and Kuwait," IMF Working Papers 08/193, International Monetary Fund.
- Hofmann, Boris, 2006. "Do monetary indicators (still) predict euro area inflation?," Discussion Paper Series 1: Economic Studies 2006,18, Deutsche Bundesbank, Research Centre.
- Kandil, Magda & Mirzaie, Aghdas, 2002. "Exchange rate fluctuations and disaggregated economic activity in the US: theory and evidence," Journal of International Money and Finance, Elsevier, vol. 21(1), pages 1-31, February.
- O. Liu & Olumuyiwa S Adedeji, 2000. "Determinants of Inflation in the Islamic Republic of Iran; A Macroeconomic Analysis," IMF Working Papers 00/127, International Monetary Fund.
- Mangal Goswami & Oya Celasun, 2002. "An Analysis of Money Demand and Inflation in the Islamic Republic of Iran," IMF Working Papers 02/205, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:09/82. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.