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The Impact of European Uncertainty on the Gulf Cooperation Council Markets

The Impact of European Uncertainty on the Gulf Cooperation Council Markets AbstractThe interconnectedness of global economies made it inevitable for countries to isolate themselves rather, they partner with each other majorly for economic and political gains. This often at times have a positive and negatives outcomes base on the fact that the more advanced economy tends to cast shadow on the smooth and predictable movement of some markets in the less advanced economy. On this note, it is essential for scholars to relate and determine the impact and the direction of the movement specifically with regards to stock market performance and Economic Policy Uncertainty (EPU), as it concerns the Gulf Cooperation Council (GCC) region and the continent of Europe. Hence, this study investigates the effect of the changes of European Policy Uncertainty index on net oil exporter countries of the GCC stock market performance. Using the Vector Autoregressive (VAR) methodology to estimate the result, the outcome of the result implies that the impact of the changes in European policy uncertainty index on GCC’s stock markets is negative but not significant; the effect of Dollar exchange rate and US 3-month Treasury bill rate is not significant and finally, the effect of Brent Oil price on GCC countries’ stock markets is positive and significant. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Heterodox Economics de Gruyter

The Impact of European Uncertainty on the Gulf Cooperation Council Markets

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Publisher
de Gruyter
Copyright
© 2017 Abdullah Saeed S Alqahtani et al., published by Sciendo
eISSN
2344-4150
DOI
10.1515/jheec-2017-0003
Publisher site
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Abstract

AbstractThe interconnectedness of global economies made it inevitable for countries to isolate themselves rather, they partner with each other majorly for economic and political gains. This often at times have a positive and negatives outcomes base on the fact that the more advanced economy tends to cast shadow on the smooth and predictable movement of some markets in the less advanced economy. On this note, it is essential for scholars to relate and determine the impact and the direction of the movement specifically with regards to stock market performance and Economic Policy Uncertainty (EPU), as it concerns the Gulf Cooperation Council (GCC) region and the continent of Europe. Hence, this study investigates the effect of the changes of European Policy Uncertainty index on net oil exporter countries of the GCC stock market performance. Using the Vector Autoregressive (VAR) methodology to estimate the result, the outcome of the result implies that the impact of the changes in European policy uncertainty index on GCC’s stock markets is negative but not significant; the effect of Dollar exchange rate and US 3-month Treasury bill rate is not significant and finally, the effect of Brent Oil price on GCC countries’ stock markets is positive and significant.

Journal

Journal of Heterodox Economics – de Gruyter

Published: Jun 1, 2017

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