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Countries, such as the GCC countries, that predominantly rely for their income on oil resources face the reality that these sources of their income would not last forever. Thus, being a member of the GCC countries, Bahrain has been pursuing the policies of sustainable and diversified economic growth. This paper uses the share of nonoil real GDP to total real GDP as a measure of diversification to access the extent of diversification in Bahrain. The shares of nonoil GDP increased from 64% in the beginning of this of this century to 80% in 2016 with an average annual growth rate of 6.2% for the period 2002-2016. This success story seems to have an inherent problem. A bivariate structural VAR model with nonoil real GDP and oil price shows that oil prices (indirectly oil sector) have positive impact on the movements of the nonoil real GDP. This means nonoil sector has been very much dependent on the oil sector and neutralizing the dependence is required for the post oil era.JEL Classification: O14, O25, Q32

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This paper examines the relationship among exchange rates, oil price, foreign prices and the domestic consumer prices of the GCC countries. A SVAR model is used to identify variety of structural (both foreign and domestic) shocks and examine how the consumer prices of these countries react to these shocks. Results show that the consumer prices of these countries, except Bahrain and Kuwait, react positively to the exchange rate shocks. Consumer prices also react positively to oil price and foreign partners' price shocks. Impulse responses and variance decompositions generally support and complement the results found in other studies.

This paper raises the question whether population growth is exogenous or endogenous with respect to the development process of Bangladesh during the last three decades. The results of an unrestricted vector autoregression model indicate that population growth does not Granger cause real GDP per capita. On the contrary, the results clearly indicate that real GDP per capita Granger causes population growth. Based on the results one may conclude that population growth is endogenous in the development process of Bangladesh. This is reflected both in the Granger causality tests and the decompositions of variances of detrended real GDP per capita and population growth.