This study investigates if the changes in economic policy uncertainty in the U.S. can explain the returns on stock markets of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The study also examines how the stock market returns of the six GCC countries respond to the changes in economic policy uncertainty in the U.S. The results demonstrate that changes in economic policy uncertainty in the U.S. are not significantly linked with the returns on all the stock markets except Oman stock market, which shows a statistical significant negative relationship with the changes in economic policy uncertainty in the U.S. Controlling for the effects of the U.S. stock market and oil price, returns on all the six GCC markets including Oman show insignificant coefficients. The returns on all the stock markets do not respond to the changes in economic policy uncertainty. The results of Granger causality tests show that the changes in economic policy uncertainty in the U.S. do not cause the returns of all the six GCC stock markets.

Summary This paper analyzes the economic impact of the oil prices, the domestic resource gaps, and the fiscal and external breakeven oil prices on the oil exporting countries (OECs). Specifically, this paper aims to examine the empirical behaviors of the oil prices, the domestic resource gaps, and the fiscal and external breakeven oil prices along with their influence on the economy of Saudi Arabia in order to determine the oil-economic gain/loss (OEG/L) and its influences on the Saudi Arabia economy over the period of 2008 to 2018. This study uses exploratory research design, with both linear and nonlinear regression models. This paper finds the oil prices, the domestic resources gaps, and the fiscal and external breakeven oil prices exert significant influences on the economic growth in Saudi Arabia. In addition, the fiscal breakeven oil price is considerably high in Saudi Arabia and has a marginal OEG/L of USD 2.3582 per barrel. Moreover, it is observed that the oil price has an irregular and unpredictable movement behavior and co-moved with the domestic resource gaps in Saudi Arabia. The findings implies that the economy diversification in Saudi Arabia could be achieved by setting policy on improving non-oil sectors and encouraging private sector involvement.

The interconnectedness of global economies made it inevitable for countries to isolate themselves rather, they partner with each other majorly for economic and political gains. This often at times have a positive and negatives outcomes base on the fact that the more advanced economy tends to cast shadow on the smooth and predictable movement of some markets in the less advanced economy. On this note, it is essential for scholars to relate and determine the impact and the direction of the movement specifically with regards to stock market performance and Economic Policy Uncertainty (EPU), as it concerns the Gulf Cooperation Council (GCC) region and the continent of Europe. Hence, this study investigates the effect of the changes of European Policy Uncertainty index on net oil exporter countries of the GCC stock market performance. Using the Vector Autoregressive (VAR) methodology to estimate the result, the outcome of the result implies that the impact of the changes in European policy uncertainty index on GCC’s stock markets is negative but not significant; the effect of Dollar exchange rate and US 3-month Treasury bill rate is not significant and finally, the effect of Brent Oil price on GCC countries’ stock markets is positive and significant.