U.S. Monetary Policy Spillovers to GCC Countries: Do Oil Prices Matter?

16 Pages Posted: 23 Jan 2020

See all articles by Olumuyiwa Adedeji

Olumuyiwa Adedeji

International Monetary Fund (IMF)

Erik Roos

Independent

Sohaib Shahid

International Monetary Fund (IMF)

Ling Zhu

International Monetary Fund (IMF)

Date Written: December 2019

Abstract

This paper provides empirical evidence that the size of the spillovers from U.S. monetarypolicy to non-oil GDP growth in the GCC countries depends on the level of oil prices. Thepotential channels through which oil prices could affect the effectiveness of monetary policyare discussed. We find that the level of oil prices tends to dampen or amplify the growthimpact of changes in U.S. monetary policy on the non-oil economies in the GCC.

Keywords: Bank rates, Market interest rates, Real interest rates, Discount rates, Interest rates on loans, Growth, Gulf Corporation Council, Spillovers, U.S. Monetary Policy, WP, GCC country, non-oil, oil price, fund rate, GCC

JEL Classification: E44, F14, F15, F42, O47, E01, G21, E52, E5, G13

Suggested Citation

Adedeji, Olumuyiwa and Roos, Erik and Shahid, Sohaib and Zhu, Ling, U.S. Monetary Policy Spillovers to GCC Countries: Do Oil Prices Matter? (December 2019). IMF Working Paper No. 19/304. Available at SSRN: https://ssrn.com/abstract=3524323

Olumuyiwa Adedeji (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Erik Roos

Independent ( email )

No Address Available
United States

Sohaib Shahid

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Ling Zhu

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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