Economic Integration Among the GCC Members
| Author | : Montaha Ahmad Abboud |
| Publisher | : |
| Total Pages | : 196 |
| Release | : 2009 |
| Genre | : Persian Gulf States |
| ISBN | : |
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Under the main goal of enhancing political and economic integration, the Gulf Co operation Council (GCC) was established in 1981 to include its six members Bahra in, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates. Several steps ha ve been taken to increase the degree of economic integration among its members, the last of which was the GCC Monetary Union which is planned to be set up by Ja nuary 2010. The main goal of this project is to introduce the GCC and test whether its membe rs are ready to enter its monetary union by the set deadline in 2010 by checking the level of macroeconomic policy convergence among its members. After introduc ing the Gulf Cooperation Council and discussing some of its achievements and agr eements in Chapter I, this project then introduces the GCC Monetary Union, its r ecent developments, its advantages and disadvantages and several other relevant points such as the applicability of the GCC as an OCA, and the choice of a peg f or the union's common currency in Chapter II. Following the previous introductions, the project then moves to the empirical pa rt of its work in Chapter IV. It is divided into two main parts; normal panel re gressions and forecasted panel regressions. After the literature review, the pre sentation of the variables, and the coverage of the several tests required to pe rform a fixed effect panel regression, the relevant long run equilibrium and sho rt run error correction models are conducted. The second part of the empirical w ork then goes on to forecast, using Box-Jenkins methodology, the rest of the dat a till the year 2010 to test whether GCC members are likely to achieve a higher level of macroeconomic policy convergence or not. The empirical work then conclu des that GCC member have only achieved partway convergence till now but are on t he right path as forecasts reveal an increase in the degree of convergence by th e year 2010. Finally, Chapter V concludes by a small discussion of the financial crisis and some of the relevant actions taken by the GCC members. This chapter then conclud es that despite all efforts to enhance economic integration among GCC members, t he establishment of a monetary union by 2010 is more a matter of economic will t han any economic efforts.
