skip to main content
Show Results with:

A Tacit Monetary Policy of the Gulf Countries: Is There a Remittances Channel?

Termos, Ali; Genc, Ismail; Naufal, George

Review of development economics. Volume 20:Issue 2 (2016, May); pp 599-610 -- Blackwell

Online access

  • Title:
    A Tacit Monetary Policy of the Gulf Countries: Is There a Remittances Channel?
  • Author: Termos, Ali;
    Genc, Ismail;
    Naufal, George
  • Found In: Review of development economics. Volume 20:Issue 2 (2016, May); pp 599-610
  • Journal Title: Review of development economics
  • Subjects: Economic development--Periodicals; Dewey: 330
  • Rights: legaldeposit
  • Publication Details: Blackwell
  • Abstract: Abstract:

    The strong economic ties between the Gulf Cooperation Council (GCC) economies and the USA are manifested in three ways: currency peg, coupling of monetary policy, and the adoption of the US dollar as the trading currency for oil. This paper examines how these dynamics result in a misalignment of the US monetary policy with the business cycles of the GCC economies. The study shows how the staggering amount of remittances outflow of the GCC economies plays a stabilizing role as a tacit monetary policy tool. Incorporating remittances in the money‐demand equation results in a more robust model than otherwise. We further find that the effect of the Federal Funds rate on money demand in these countries diminishes in significance during the period of oil boom between 2002 and 2009. However, the transmission effect of the recession periods in the USA into the demand for money in the GCC countries is not statistically significant.


  • Identifier: System Number: LDEAvdc_100031931968.0x000001; Journal ISSN: 1363-6669; 10.1111/rode.12249
  • Publication Date: 2016
  • Physical Description: Electronic
  • Shelfmark(s): ELD Digital store

Searching Remote Databases, Please Wait