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Desynchronized: The Comovement of Non-Hydrocarbon Business Cycles in the GCC
Author: Mr. Serhan Cevikhttps://orcid.org/0000-0002-2373-2023
Series:
IMF Working Papers
Volume/Issue:
Volume 2011: Issue 286
Language:
English
Publication Date:
01 Dec 2011
DOI:
https://doi.org/10.5089/9781463927202.001
ISBN:
9781463927202
ISSN:
1018-5941
Pages:
25
Keywords:
WP; GCC country; aggregate demand; Business cycles; business cycle synchronization; band-pass filter; concordance; GCC economy; Non-hydrocarbon business cycle frequency; business cycle analysis; pairwise correlation coefficients; business cycle desynchronization; Monetary unions; Private consumption; Government consumption; Public investment spending; Asia and Pacific; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper investigates the empirical characteristics of business cycles and the extent of cyclical comovement in the Gulf Cooperation Council (GCC) countries, using various measures of synchronization for non-hydrocarbon GDP and constituents of aggregate demand during the period 1990-2010. By applying the Christiano-Fitzgerald asymmetric band-pass filter and a mean corrected concordance index, the paper identifies the degree of non-hydrocarbon business cycle synchronization?one of the main prerequisites for countries considering to establish a monetary union. The empirical results show low and heterogeneous synchronization in non-hydrocarbon business cycles across the GCC economies, and a decline in the degree of synchronicity in the 2000s, if Kuwait is excluded from the sample, partly because of divergent fiscal policies.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund