What are the Potential Economic Benefits of Enlarging the Gulf Cooperation Council?

33 Pages Posted: 15 Feb 2006

See all articles by Saade Chami

Saade Chami

International Monetary Fund (IMF)

Selim Ali Elekdag

International Monetary Fund (IMF) - Policy Development and Review Department

Ivan Tchakarov

International Monetary Fund (IMF) - Asia and Pacific Department

Date Written: August 2004

Abstract

This paper uses a variant of the IMF`s Global Economy Model (GEM) to estimate the macroeconomic effects of Yemen`s full accession into the Gulf Cooperation Council (GCC). After calibrating the model to Yemen and the GCC countries, several simulations were carried out to estimate the potential impact of economic integration on both. The paper draws two fundamental conclusions. First, further steps in regional integration would enhance competition and produce large economic benefits for both Yemen and the GCC countries. In particular, we show that in some cases economic integration could increase GDP in Yemen by as much as 18 percent and in the GCC by as much as 20 percent over the long run. Second, even if market structures do not improve substantially, GCC enlargement can still generate substantial spillover gains with consumption increasing by up to 7 percent in Yemen and 8 percent in the GCC, respectively.

Keywords: regional integration, competition, IMF`s Global Economy Model (GEM)

JEL Classification: F02, F41, F47

Suggested Citation

Chami, Saade and Elekdag, Selim Ali and Tchakarov, Ivan, What are the Potential Economic Benefits of Enlarging the Gulf Cooperation Council? (August 2004). IMF Working Paper No. 04/152, Available at SSRN: https://ssrn.com/abstract=878977

Saade Chami (Contact Author)

International Monetary Fund (IMF) ( email )

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

Selim Ali Elekdag

International Monetary Fund (IMF) - Policy Development and Review Department ( email )

700 19th St. NW
Washington, DC 20431
United States

Ivan Tchakarov

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
73
Abstract Views
720
rank
349,858
PlumX Metrics