Faithin Omaha eBook Collection

Download or read book Inflation Differentials in the GCC written by Mr.Kamiar Mohaddes and published by International Monetary Fund. This book was released on 2011-12-01 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper uses a pairwise approach to investigate the main factors that have been driving inflation differentials in the Gulf Cooperation Council (GCC) region for the past two decades. The results suggest that inflation differentials in the GCC are largely influenced by the oil cycle, mainly through the credit and fiscal channels. This implies that closer coordination of fiscal policies will be key for facilitating the closer integration of the GCC economies and ahead of the move to a monetary union. The results also indicate that after controlling for cyclical factors, convergence increased even during the recent oil boom.