To What Extent GDP, Trade and Cost of Transport are Interdependent in GCC Countries? Unrestricted VAR Approach

Abstract :

This paper aims to analyze the interdependencies among GDP, trade, and cost of transport. For this purpose, the study tested a 360 cointegrated stationary observation for the GCC countries over the period 2000 to 2010. The results revealed that a high alternate adverse interdependence is only between GDP and cost of transport. While a shock of GDP has led to a parallel impact on the level of foreign trade and vice versa, in which the economic growth is significantly contributing in the variance of trade.

Key words: GCC countries, GDP, Trade, Transport Cost, VAR model

JEL Classification:  C53, C61, F14, F43

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