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On the GCC Currency Union  






المحتويات : 
Essentially, the impact of
the currency union on member countries depends on whether the common currency
area is optimal in the sense that the effect of the asymmetric shocks is small,
Mundell (1961). Typically, researchers use VAR of different types to analyze
the data. For robustness, we use different methodologies. First, we use
different estimators to estimate a small textbook model for the panel of the
Gulf Cooperation Council countries (GCC) from 1970 to 2006, where the shortrun
equilibrium real output and the real exchange rate are determined by the
intersection of the assets and goods markets equilibrium schedules. And the
central bank fixes the exchange rate by keeping the money supply at a level
where the domestic interest rate is equal to the foreign interest rate. Then we
test for symmetry using the nonparametric Triples test, Randles et al. (1980).
Third, we introduce a nonparametric multivariate statistic to test whether the
variances of the shocks (the conditional variance) are equal across countries.

