Perspectives on the GCC Monetary Union

Abstract

The Gulf Cooperation Council (GCC) countries in 2001 proposed to establish the Gulf Monetary Union (GMU) by 2010. As we know it did not happen; however, negotiations have never been stopped and they plan to establish it in the near future. In the meantime authors have been busy in analyzing the feasibility (viability) of the GMU. This is a review article about the proposed GMU. It starts with the review of basic premise of the convergence criteria. It also reviews the studies on business cycle and shocks synchronization of the GCC countries. Researchers (based on their empirical evidence) differ in their opinions whether the GCC countries are yet to form the GMU.