Price level and inflation in the GCC countries

We estimate a micro-founded life-cycle consumption model for Saudi Arabia over the period 1970-2017 using error correction model procedures. Dynamic adjustments are significant, and both income and wealth are found to have significant effects, with a long-run marginal propensity to consume out of the income of 0.95 and out of the wealth of 0.06. The sensitivity of consumption to income and wealth, as well as the estimated short-term effects of price and real interest rate, are consistent with the rapidly growing Saudi economy. By capturing the key determinants of the life-cycle model, our approach is useful for the design of macroeconomic policy. We estimate the impact of the recent VAT reform.

show abstract

“…In addition, the test shows that the inflation rate (cpi) is not stationary (similar to Murshed and Nakibullah 2015).…”

Section: Resultsmentioning

confidence: 99%

Estimating the household consumption function in Saudi Arabia: an error correction approach

et al. 2019

View full text Add to dashboard Cite

show abstract

“…This study draws from recent studies on the GCC price level and inflation (Hasan andNakibullah, 2015, andNakibullah, 2016). These studies argue that oil price has direct and indirect impact on aggregate demand and supply of these countries.…”

Section: Resultsmentioning

confidence: 99%

State of Shocks Synchronization among Members of the GCC

Nakibullah¹

2017

RWE

Self Cite

View full text Add to dashboard Cite

This paper examines fluctuations of aggregate supply and demand shocks across the GCC countries. It argues that the world oil price influences aggregate demand and supply of these countries. Thus, in contrast to other studies, a SVAR model is used to identify structural shocks by including the oil price. The aggregate supply and demand shocks are then analyzed. The correlations of supply shocks among the member countries are either negative or low positive. Similarly, the correlations of demand shocks, except few pairs of countries, are also negative and low positive. Thus, shocks are not synchronized. These results are different than the results found in other similar studies probably due to the model specification. The implication of the findings is that the GCC countries would find it difficult to adjust supply and demand shocks if they form their aspired Gulf Monetary Union.

show abstract

“…It refines about 260,000 barrels per day and the majority of the crude supplied by the Saudi ARAMCO though pipelines. Hasan and Nakibullah (2015), and e Espinoza and Senhadji (2011).…”

Section: Introductionmentioning

confidence: 99%

Economic Diversification in Bahrain

Nakibullah¹

2018

AEF

Self Cite

View full text Add to dashboard Cite

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

show abstract

Price level and inflation in the GCC countries

Cited by 13 publications

References 15 publications

Estimating the household consumption function in Saudi Arabia: an error correction approach

Estimating the household consumption function in Saudi Arabia: an error correction approach

State of Shocks Synchronization among Members of the GCC

Economic Diversification in Bahrain

Contact Info

Product

Resources

About