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GCC Monetary Union and the Degree of Macroeconomic Policy Coordination, Bassem Kamar, Sami Ben Naceur

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
Table Of Contents
Contents; I. Introduction; II. Overview of Currency Unions; III. Determinants of the RER Behavior; Figures; 1. Calculated RER; 2. Monetary Policy Indicator - Broad Money to GDP; 3. Budget Balance to GDP; 4. Government Consumption to GDP; 5. Trade Openness; 6. Measures of Capital Flows; IV. The Econometric Methodology; V. Estimation and Interpretation of the Results; A. Estimation of the Long-Run Determinants of the RER Behavior in the GCC; B. Interpretation of the Results; C. RER Equilibrium and Misalignment; VI. Conclusion and Policy Recommendations; 7. RER Misalignment; Tables
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (35 p.)
Specific Material Designation
Form Of Item

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