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

By Olumuyiwa S Adedeji, Erik Roos, Sohaib Shahid, Ling Zhu

December 27, 2019

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Format: Chicago

Olumuyiwa S Adedeji, Erik Roos, Sohaib Shahid, and Ling Zhu. U.S. Monetary Policy Spillovers to GCC Countries: Do Oil Prices Matter?, (USA: International Monetary Fund, 2019) accessed November 9, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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

Subject: Asset and liability management, Central bank policy rate, Financial sector policy and analysis, Financial services, Liquidity, Oil prices, Prices, Real interest rates, Spillovers

Keywords: Central bank policy rate, Federal funds rate, GCC country, GCC., Global, Growth, Gulf Corporation Council, Interaction term, Liquidity, Liquidity fluctuation, Monetary policy spillover, Oil price, Oil prices, Price, Real interest rates, Spillovers, U.S. Monetary Policy, WP

Publication Details

Pages:

15
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2019/304
Stock No:

WPIEA2019304
ISBN:

9781513519357
ISSN:

1018-5941

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