A Coincident Indicator of the Gulf Cooperation Council (GCC) Business Cycle

April 1, 2009

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Format: Chicago

Abdullah Alhassan. A Coincident Indicator of the Gulf Cooperation Council (GCC) Business Cycle, (USA: International Monetary Fund, 2009) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper constructs a coincident indicator for the Gulf Cooperation Council (GCC) area business cycle. The resulting coincident indicator provides a reliable measure of the GCC business cycle; over the last decade, the GCC coincident index and the real GDP growth have moved closely together. Since the indicator is constructed using a small number of common factors, the strong correlation between the indicator and real GDP growth points to a high degree of commonality across GCC economies. The timing and direction of movements in macroeconomic variables are characterized with respect to the coincident indicator. Finally, to obtain a meaningful economic interpretation of the latent factors, their behavior is compared to the observed economic variables.

Subject: Business cycles, Consumer prices, Cyclical indicators, Factor models, Nominal effective exchange rate

Keywords: Business cycle, Money supply, Time series, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2009/073
Stock No:

WPIEA2009073
ISBN:

9781451872200
ISSN:

1018-5941

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