On a Common Currency for the GCC Countries

On a Common Currency for the GCC Countries

Author: Mr.Esteban Jadresic

Publisher: International Monetary Fund

Published: 2002-12-01

Total Pages: 27

ISBN-13: 1451969481

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This paper assesses the eventual replacement of the currencies of the GCC countries with a common currency. It concludes that a properly implemented currency union may contribute to enhance economic efficiency in the region, deepen regional integration, and develop its non-oil economy. However, it cautions that a currency union should be seen as only one component of a much broader integration effort. This should include the removal of the distortions that inhibit intraregional trade and investment, agreements on policy frameworks to ensure macroeconomic stability, and further political integration. The paper also addresses the choice of exchange rate arrangement for the unified currency.


Book Synopsis On a Common Currency for the GCC Countries by : Mr.Esteban Jadresic

Download or read book On a Common Currency for the GCC Countries written by Mr.Esteban Jadresic and published by International Monetary Fund. This book was released on 2002-12-01 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses the eventual replacement of the currencies of the GCC countries with a common currency. It concludes that a properly implemented currency union may contribute to enhance economic efficiency in the region, deepen regional integration, and develop its non-oil economy. However, it cautions that a currency union should be seen as only one component of a much broader integration effort. This should include the removal of the distortions that inhibit intraregional trade and investment, agreements on policy frameworks to ensure macroeconomic stability, and further political integration. The paper also addresses the choice of exchange rate arrangement for the unified currency.

Is the Gcc Also a Common Currency Area?

Is the Gcc Also a Common Currency Area?

Author: George Tawadros

Publisher: LAP Lambert Academic Publishing

Published: 2013

Total Pages: 64

ISBN-13: 9783659337147

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In this book, the feasibility of the Gulf countries forming a common currency area is assessed using two distinct, but complementary, approaches. The empirical results based on the size of demand and supply disturbances, their cross-country correlations, and the speed of domestic adjustment identifies a grouping of countries (Bahrain, Oman, Saudi Arabia, and the UAE) for potential monetary unification. In addition, the empirical results show that the six member countries share common long-run and short-run cyclical movements. Furthermore, an estimate of the output loss in relinquishing policy autonomy to join a regional currency arrangement is provided. These estimates appear to be relatively small, and are likely to be less than the efficiency gains from adopting a common currency.


Book Synopsis Is the Gcc Also a Common Currency Area? by : George Tawadros

Download or read book Is the Gcc Also a Common Currency Area? written by George Tawadros and published by LAP Lambert Academic Publishing. This book was released on 2013 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this book, the feasibility of the Gulf countries forming a common currency area is assessed using two distinct, but complementary, approaches. The empirical results based on the size of demand and supply disturbances, their cross-country correlations, and the speed of domestic adjustment identifies a grouping of countries (Bahrain, Oman, Saudi Arabia, and the UAE) for potential monetary unification. In addition, the empirical results show that the six member countries share common long-run and short-run cyclical movements. Furthermore, an estimate of the output loss in relinquishing policy autonomy to join a regional currency arrangement is provided. These estimates appear to be relatively small, and are likely to be less than the efficiency gains from adopting a common currency.

The GCC Monetary Union

The GCC Monetary Union

Author: Mr.S. Nuri Erbas

Publisher: International Monetary Fund

Published: 2003-04-01

Total Pages: 26

ISBN-13: 1451848811

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We compare the dollar peg to a dollar-euro basket peg as alternative exchange rate regimes for the incipient Gulf Cooperation Council (GCC) currency union. Quantitative evidence suggests basket peg does not dominate dollar peg for improving external stability. However, as GCC exports and external financial assets become more diversified, a more flexible exchange policy may be necessary for competitiveness and stability. Pegging the prospective common GCC currency to a basket, like the dollar-euro basket, may provide a conservative transitional strategy toward a more flexible exchange rate policy.


Book Synopsis The GCC Monetary Union by : Mr.S. Nuri Erbas

Download or read book The GCC Monetary Union written by Mr.S. Nuri Erbas and published by International Monetary Fund. This book was released on 2003-04-01 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: We compare the dollar peg to a dollar-euro basket peg as alternative exchange rate regimes for the incipient Gulf Cooperation Council (GCC) currency union. Quantitative evidence suggests basket peg does not dominate dollar peg for improving external stability. However, as GCC exports and external financial assets become more diversified, a more flexible exchange policy may be necessary for competitiveness and stability. Pegging the prospective common GCC currency to a basket, like the dollar-euro basket, may provide a conservative transitional strategy toward a more flexible exchange rate policy.

Monetary Union Among Member Countries of the Gulf Cooperation Council

Monetary Union Among Member Countries of the Gulf Cooperation Council

Author: Mr.Ugo Fasano-Filho

Publisher: International Monetary Fund

Published: 2003-08-29

Total Pages: 80

ISBN-13: 9781589062191

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The six member countries of the Gulf Cooperation Council (GCC)--Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates--have made important progress toward economic and financial integration, with the aim of establishing an economic and monetary union. This paper provides a detailed analysis of the economic performance and policies of the GCC countries during 1990-2002. Drawing on the lessons from the experience of selected currency and monetary unions in Africa, Europe, and the Caribbean, it assesses the potential costs and benefits of a common currency for GCC countries and also reviews the options for implementing a monetary union among these countries.


Book Synopsis Monetary Union Among Member Countries of the Gulf Cooperation Council by : Mr.Ugo Fasano-Filho

Download or read book Monetary Union Among Member Countries of the Gulf Cooperation Council written by Mr.Ugo Fasano-Filho and published by International Monetary Fund. This book was released on 2003-08-29 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: The six member countries of the Gulf Cooperation Council (GCC)--Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates--have made important progress toward economic and financial integration, with the aim of establishing an economic and monetary union. This paper provides a detailed analysis of the economic performance and policies of the GCC countries during 1990-2002. Drawing on the lessons from the experience of selected currency and monetary unions in Africa, Europe, and the Caribbean, it assesses the potential costs and benefits of a common currency for GCC countries and also reviews the options for implementing a monetary union among these countries.

Currency Union and Exchange Rate Issues

Currency Union and Exchange Rate Issues

Author: Ronald MacDonald

Publisher: Edward Elgar Publishing

Published: 2010-01-01

Total Pages: 209

ISBN-13: 1849805377

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This book written by leading academics and practitioners in the field brings together cutting edge research on exchange rate regime and monetary union issues. There is a particular focus on the implications for member states of the Gulf Cooperation Council (GCC) which is itself working towards forming a monetary union for the Gulf States. The relatively dramatic movements in the US dollar in the recent past, and also in the early 1990s, have called the practice of pegging to the US dollar into question for a group of countries that predominantly rely on hydrocarbons as their primary export. The book considers the key issues which must be addressed by the GCC in trying to form a monetary union for the Gulf countries and also the rigid pegging of member states currencies to the US dollar. The proposed monetary union raises clear issues in terms of the appropriateness of such a regime for these countries and whether, for example, the necessary institutional mechanisms are in place ahead of the proposed union. Currency Union and Exchange Rate Issues brings together the perspectives of a group of experts who focus on these important issues, and provide analysis of the policy options. Academics, policymakers and postgraduates in international finance will find much to consider and learn from in this informative book.


Book Synopsis Currency Union and Exchange Rate Issues by : Ronald MacDonald

Download or read book Currency Union and Exchange Rate Issues written by Ronald MacDonald and published by Edward Elgar Publishing. This book was released on 2010-01-01 with total page 209 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book written by leading academics and practitioners in the field brings together cutting edge research on exchange rate regime and monetary union issues. There is a particular focus on the implications for member states of the Gulf Cooperation Council (GCC) which is itself working towards forming a monetary union for the Gulf States. The relatively dramatic movements in the US dollar in the recent past, and also in the early 1990s, have called the practice of pegging to the US dollar into question for a group of countries that predominantly rely on hydrocarbons as their primary export. The book considers the key issues which must be addressed by the GCC in trying to form a monetary union for the Gulf countries and also the rigid pegging of member states currencies to the US dollar. The proposed monetary union raises clear issues in terms of the appropriateness of such a regime for these countries and whether, for example, the necessary institutional mechanisms are in place ahead of the proposed union. Currency Union and Exchange Rate Issues brings together the perspectives of a group of experts who focus on these important issues, and provide analysis of the policy options. Academics, policymakers and postgraduates in international finance will find much to consider and learn from in this informative book.

Monetary Union in the Gulf

Monetary Union in the Gulf

Author: Emilie Rutledge

Publisher: Routledge

Published: 2008-07-30

Total Pages: 160

ISBN-13: 1134046316

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This book examines the proposed currency union of the Gulf Co-operation Council (GCC) Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates which is due to come into effect in 2010.


Book Synopsis Monetary Union in the Gulf by : Emilie Rutledge

Download or read book Monetary Union in the Gulf written by Emilie Rutledge and published by Routledge. This book was released on 2008-07-30 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines the proposed currency union of the Gulf Co-operation Council (GCC) Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates which is due to come into effect in 2010.

The Feasibility of Currency Union in Gulf Cooperation Council Countries

The Feasibility of Currency Union in Gulf Cooperation Council Countries

Author: Essahbi Essaadi

Publisher:

Published: 2017

Total Pages: 0

ISBN-13:

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This paper study the feasibility of a monetary union among Gulf Cooperation Council (GCC) countries, by measuring the evolution of economic integration among them. Considering the critical role of crisis and shocks in the integration process within the region, we determine whether GCC countries are characterised by a common business cycle. We suggest a different empirical approach that, unlike previous studies, allows one to endogenously detect structural changes in the comovement process between outputs. We apply a new measure for this region that is based on the time-varying coherence function. Such a measure not only detects comovement dynamics but also distinguishes these dynamics in terms of short- and long-term cycles. Additionally, we can test whether certain countries tend to be more synchronised. The main finding of this study is that not all GCC countries share a common short-term business cycle. However, in the long term, all country-pairs indicate a medium-level synchronisation in the most recent subperiods. The new role of the United Arab Emirates' regional trade platform allows it to strengthen long-term business cycle comovement, thus differentiating it from other GCC country-pairs that have shown a decline in the last two subperiods.


Book Synopsis The Feasibility of Currency Union in Gulf Cooperation Council Countries by : Essahbi Essaadi

Download or read book The Feasibility of Currency Union in Gulf Cooperation Council Countries written by Essahbi Essaadi and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper study the feasibility of a monetary union among Gulf Cooperation Council (GCC) countries, by measuring the evolution of economic integration among them. Considering the critical role of crisis and shocks in the integration process within the region, we determine whether GCC countries are characterised by a common business cycle. We suggest a different empirical approach that, unlike previous studies, allows one to endogenously detect structural changes in the comovement process between outputs. We apply a new measure for this region that is based on the time-varying coherence function. Such a measure not only detects comovement dynamics but also distinguishes these dynamics in terms of short- and long-term cycles. Additionally, we can test whether certain countries tend to be more synchronised. The main finding of this study is that not all GCC countries share a common short-term business cycle. However, in the long term, all country-pairs indicate a medium-level synchronisation in the most recent subperiods. The new role of the United Arab Emirates' regional trade platform allows it to strengthen long-term business cycle comovement, thus differentiating it from other GCC country-pairs that have shown a decline in the last two subperiods.

The GCC Monetary Union

The GCC Monetary Union

Author: George T. Abed

Publisher:

Published: 2006

Total Pages: 25

ISBN-13:

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We compare the dollar peg to a dollar-euro basket peg as alternative exchange rate regimes for the incipient Gulf Cooperation Council (GCC) currency union. Quantitative evidence suggests basket peg does not dominate dollar peg for improving external stability. However, as GCC exports and external financial assets become more diversified, a more flexible exchange policy may be necessary for competitiveness and stability. Pegging the prospective common GCC currency to a basket, like the dollar-euro basket, may provide a conservative transitional strategy toward a more flexible exchange rate policy.


Book Synopsis The GCC Monetary Union by : George T. Abed

Download or read book The GCC Monetary Union written by George T. Abed and published by . This book was released on 2006 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: We compare the dollar peg to a dollar-euro basket peg as alternative exchange rate regimes for the incipient Gulf Cooperation Council (GCC) currency union. Quantitative evidence suggests basket peg does not dominate dollar peg for improving external stability. However, as GCC exports and external financial assets become more diversified, a more flexible exchange policy may be necessary for competitiveness and stability. Pegging the prospective common GCC currency to a basket, like the dollar-euro basket, may provide a conservative transitional strategy toward a more flexible exchange rate policy.

GCC Monetary Union and the Degree of Macroeconomic Policy Coordination

GCC Monetary Union and the Degree of Macroeconomic Policy Coordination

Author: Bassem Kamar

Publisher: International Monetary Fund

Published: 2007-10

Total Pages: 40

ISBN-13:

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Coordinating macroeconomic policies is a pre-requisite to a successful launch of the common currency in the GCC countries. Relying on the Behavioral Equilibrium Exchange Rate approach as a theoretical framework, we apply the Pooled Mean Group methodology to determine the similarity of the impact of a selected set of macroeconomic indicators on the real exchange rate in each country. Our empirical evidence points to a clear coordination of monetary policy, fiscal policy, government consumption, and openness across the member countries. While RER misalignments also show a substantial convergence building over time, differences in the misalignments of the two polar cases remain rather substantial, calling for further coordination and policy harmonization.


Book Synopsis GCC Monetary Union and the Degree of Macroeconomic Policy Coordination by : Bassem Kamar

Download or read book GCC Monetary Union and the Degree of Macroeconomic Policy Coordination written by Bassem Kamar and published by International Monetary Fund. This book was released on 2007-10 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Coordinating macroeconomic policies is a pre-requisite to a successful launch of the common currency in the GCC countries. Relying on the Behavioral Equilibrium Exchange Rate approach as a theoretical framework, we apply the Pooled Mean Group methodology to determine the similarity of the impact of a selected set of macroeconomic indicators on the real exchange rate in each country. Our empirical evidence points to a clear coordination of monetary policy, fiscal policy, government consumption, and openness across the member countries. While RER misalignments also show a substantial convergence building over time, differences in the misalignments of the two polar cases remain rather substantial, calling for further coordination and policy harmonization.

Sources of Macroeconomic Fluctuations in the GCC Area

Sources of Macroeconomic Fluctuations in the GCC Area

Author: Eisa Aleisa

Publisher:

Published: 2005

Total Pages: 0

ISBN-13:

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The primary objective of this study is to assess the optimality of a currency area in the six Gulf countries. To evaluate this important strategic it is crucial to investigate the sources of macroeconomic fluctuations in the Gulf Cooperation Council (GCC) area. These countries are Saudi Arabia, Bahrain, Qatar, Kuwait, and United Arab Emirates. These countries share many economic and political characteristics, which are conducive to a monetary union. Moreover, these countries have existing cooperation schemes that make a monetary union feasible. This paper focuses on the symmetry of underling macroeconomic shocks. Using a macroeconomic model and structural VAR models constructed to suit the GCC economies for the 1980-2000 period, we identify terms of trade shocks, trade balance shocks, supply shocks, balance of payments shocks, aggregate demand shocks and monetary shocks. The results show that the macroeconomic structure is largely similar in the GCC economies. In that sense there are potential gains to be obtained from forming a common currency. Moreover, the results show that terms of trade shocks are highly correlated in the region. A single currency would eliminate the transaction costs associated with using different currencies in the GCC countries. One can expect some efficiency gains with enhanced trade capital flows from abandoning a multiplicity of currencies. Moreover, a single currency may promote better policy formulation and coordination and enhances exchange rate credibility.


Book Synopsis Sources of Macroeconomic Fluctuations in the GCC Area by : Eisa Aleisa

Download or read book Sources of Macroeconomic Fluctuations in the GCC Area written by Eisa Aleisa and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The primary objective of this study is to assess the optimality of a currency area in the six Gulf countries. To evaluate this important strategic it is crucial to investigate the sources of macroeconomic fluctuations in the Gulf Cooperation Council (GCC) area. These countries are Saudi Arabia, Bahrain, Qatar, Kuwait, and United Arab Emirates. These countries share many economic and political characteristics, which are conducive to a monetary union. Moreover, these countries have existing cooperation schemes that make a monetary union feasible. This paper focuses on the symmetry of underling macroeconomic shocks. Using a macroeconomic model and structural VAR models constructed to suit the GCC economies for the 1980-2000 period, we identify terms of trade shocks, trade balance shocks, supply shocks, balance of payments shocks, aggregate demand shocks and monetary shocks. The results show that the macroeconomic structure is largely similar in the GCC economies. In that sense there are potential gains to be obtained from forming a common currency. Moreover, the results show that terms of trade shocks are highly correlated in the region. A single currency would eliminate the transaction costs associated with using different currencies in the GCC countries. One can expect some efficiency gains with enhanced trade capital flows from abandoning a multiplicity of currencies. Moreover, a single currency may promote better policy formulation and coordination and enhances exchange rate credibility.