IDEAS home Printed from https://ideas.repec.org/a/taf/intecj/v21y2007i4p521-548.html
   My bibliography  Save this article

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

Author

Listed:
  • Saade Chami
  • Selim Elekdag
  • Ivan Tchakarov

Abstract

This paper uses a variant of the IMF's Global Economy Model (GEM) to estimate the macroeconomic benefits of Yemen's accession into the Gulf Cooperation Council (GCC). After calibrating the model to Yemen and the GCC block, several simulations are carried out to estimate the potential impact of economic integration on both regions. The paper draws two fundamental conclusions. First, regional integration enhances competition which produces large economic benefits for both Yemen and the GCC. In particular, we show that in some cases economic integration can increase GDP in Yemen by up to 14% and in the GCC by up to 7% over the long run. Second, even if market structures do not improve substantially, GCC enlargement can still generate substantial spillover gains in each block. More specifically, one measure of economic prosperity measured by consumption can increase by up to 7% in Yemen and up to 8% in the GCC.

Suggested Citation

  • Saade Chami & Selim Elekdag & Ivan Tchakarov, 2007. "What are the Potential Economic Benefits of Enlarging the Gulf Cooperation Council?," International Economic Journal, Taylor & Francis Journals, vol. 21(4), pages 521-548.
    • Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:521-548
    DOI: 10.1080/10168730701699059
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/10168730701699059
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10168730701699059?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Baldwin, Richard E. & Forslid, Rikard, 2000. "Trade liberalisation and endogenous growth: A q-theory approach," Journal of International Economics, Elsevier, vol. 50(2), pages 497-517, April.
    2. Blomström, Magnus & Kokko, Ari, 1997. "Regional Integration and Foreign Direct Investment," CEPR Discussion Papers 1659, C.E.P.R. Discussion Papers.
    3. Edison, Hali J. & Levine, Ross & Ricci, Luca & Slok, Torsten, 2002. "International financial integration and economic growth," Journal of International Money and Finance, Elsevier, vol. 21(6), pages 749-776, November.
    4. Bayoumi, Tamim & Laxton, Douglas & Pesenti, Paolo, 2004. "Benefits and spillovers of greater competition in Europe: a macroeconomic assessment," Working Paper Series 341, European Central Bank.
    5. Blomstrom, Magnus & Kokko, Ari, 1997. "Regional integration and foreign direct investment : a conceptual framework and three cases," Policy Research Working Paper Series 1750, The World Bank.
    6. Seghezza, Elena & Baldwin, Richard E., 2008. "Testing for Trade-Induced Investment-Led Growth," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 61(2-3), pages 507-537.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Burke, Edward, 2012. "One blood and one destiny? Yemen’s relations with the Gulf Cooperation Council," LSE Research Online Documents on Economics 55241, London School of Economics and Political Science, LSE Library.
    2. Takagi, Shinji, 2012. "Establishing Monetary Union in the Gulf Cooperation Council: What Lessons for Regional Cooperation?," ADBI Working Papers 390, Asian Development Bank Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mr. Selim A Elekdag & Mr. Saade Chami & Mr. Ivan Tchakarov, 2004. "What Are the Potential Economic Benefits of Enlarging the Gulf Cooperation Council?," IMF Working Papers 2004/152, International Monetary Fund.
    2. M. Ayhan Kose & Guy M. Meredith & Christopher M. Towe, 2005. "How Has NAFTA Affected the Mexican Economy? Review and Evidence," Springer Books, in: Rolf J. Langhammer & Lúcio Vinhas Souza (ed.), Monetary Policy and Macroeconomic Stabilization in Latin America, pages 35-81, Springer.
    3. Rana, Arslan Tariq & Kebewar, Mazen, 2014. "The Political Economy of FDI flows into Developing Countries: Does the depth of International Trade Agreements Matter?," EconStor Preprints 91501, ZBW - Leibniz Information Centre for Economics.
    4. UMBA, Gilles, 2013. "Ouverture commerciale et croissance économique en RD Congo : une analyse en équilibre général calculable [Trade openness and economic growth in the DR Congo : an analysis in a computable general eq," MPRA Paper 66092, University Library of Munich, Germany, revised 13 Aug 2015.
    5. Khalid Sekkat & Marie‐Ange Veganzones‐Varoudakis, 2007. "Openness, Investment Climate, and FDI in Developing Countries," Review of Development Economics, Wiley Blackwell, vol. 11(4), pages 607-620, November.
    6. Piazolo, Daniel & Kokta, Robert M. & Buch, Claudia M., 2001. "Does the East Get What Would Otherwise Flow to the South? FDI Diversion in Europe," Kiel Working Papers 1061, Kiel Institute for the World Economy (IfW Kiel).
    7. Mariam Camarero & Cecilio Tamarit, 2003. "Estimating exports and imports demand for Manufactured goods: The role of FDI," European Economy Group Working Papers 22, European Economy Group.
    8. Baldwin, Richard E. & Seghezza, Elena, 1996. "The New Growth Theory: Its Logic and Trade Policy Implications," 1996: Implications of the New Growth Theory to Agricultural Trade Research and Trade Policy Conference, December 1996, Washington DC 50862, International Agricultural Trade Research Consortium.
    9. Kose, M. Ayhan & Prasad, Eswar S. & Terrones, Marco E., 2006. "How do trade and financial integration affect the relationship between growth and volatility?," Journal of International Economics, Elsevier, vol. 69(1), pages 176-202, June.
    10. Sánchez-Martín, Miguel Eduardo & de Arce, Rafael & Escribano, Gonzalo, 2014. "Do changes in the rules of the game affect FDI flows in Latin America? A look at the macroeconomic, institutional and regional integration determinants of FDI," European Journal of Political Economy, Elsevier, vol. 34(C), pages 279-299.
    11. Belem Vasquez, 2007. "A Dynamic Analysis of Some Instruments of Fiscal, Monetary and Commercial Policies in Mexico," EcoMod2007 23900089, EcoMod.
    12. Slavo Radosevic, 2003. "The emerging industrial architecture of the wider Europe: The co-evolution of industrial and political structures," UCL SSEES Economics and Business working paper series 29, UCL School of Slavonic and East European Studies (SSEES).
    13. Florian Mölders & Ulrich Volz, 2011. "Trade creation and the status of FTAs: empirical evidence from East Asia," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(3), pages 429-456, September.
    14. Ansari, Nasim & Khan, Tamanna, 2011. "FDI and regional economic integration in SAARC region: problems and prospects," MPRA Paper 32365, University Library of Munich, Germany.
    15. Andreas Assiotis & Kevin Sylwester, 2013. "Do the effects of corruption upon growth differ between democracies and autocracies?," University of Cyprus Working Papers in Economics 06-2013, University of Cyprus Department of Economics.
    16. Penélope Pacheco‐López, 2005. "Foreign Direct Investment, Exports and Imports in Mexico," The World Economy, Wiley Blackwell, vol. 28(8), pages 1157-1172, August.
    17. Li, Qiaomin & Scollay, Robert & Maani, Sholeh, 2016. "Effects on China and ASEAN of the ASEAN-China FTA: The FDI perspective," Journal of Asian Economics, Elsevier, vol. 44(C), pages 1-19.
    18. Hiroshi Mukunoki, 2017. "The welfare effect of a free trade agreement in the presence of foreign direct investment and rules of origin," Review of International Economics, Wiley Blackwell, vol. 25(4), pages 733-759, September.
    19. Celine Azemar & Julia Darby & Rodolphe Desbordes & Ian Wooton, 2012. "Market Familiarity and the Location of South and North MNEs," Economics and Politics, Wiley Blackwell, vol. 24(3), pages 307-345, November.
    20. Komlan Fiodendji & Kodjo Evlo, 2015. "Do Institutions Quality Affect FDI Inflows in Sub-Saharan African Countries?," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 5(1), pages 1-8.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:521-548. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RIEJ20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.