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Provides original insights into the functioning of the GCC macro-economy. It covers structural, long-term, issues such as the determinants of economic growth, the impact of foreign workers on labour markets, wages, and competitiveness, and the economic impact of a rich state that wants to distribute oil money

Economic development --- Macroeconomics. --- Développement économique --- Macroéconomie --- Gulf Cooperation Council --- Persian Gulf States --- Etats du golfe Persique --- Economic conditions --- Conditions économiques --- Gulf Cooperation Council. --- AE / United Arab Emirates --- SA / Saudi Arabia - Saoedi Arabië - Arabie Saoudite --- ARB / Arab Countries --- KW / Kuwait - Koeweit - Koweit --- QA / Qatar - Katar --- BH / Bahrain - Bahrein --- OM / Oman --- 331.31 --- 333.400 --- 336.61 --- Economisch beleid. --- Geldwezen: algemeenheden. --- Financieel beleid. --- Economisch beleid --- Geldwezen: algemeenheden --- Financieel beleid

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This paper assesses the extent of regional financial integration in the Caribbean Community (CARICOM) by analyzing equity prices in the region and rigidity of external financing constraints. The results are presented in a cross-regional perspective. The Caribbean stock markets are not as well integrated as one would expect from the extent of cross-listing and importance of regional banking groups: price differentials of cross-listed stocks reach an average of 5 percent. Auto-Regressive models suggest that these price differentials are only slowly arbitraged away, with half-lives exceeding 7 worked days, even when looking only at large arbitrage opportunities (using a Threshold Auto-Regressive model). A speculative methodology using macroeconomic data seems to confirm these findings. A strong mean reversion of the current account (respectively regional trade imbalances) is interpreted, following Obstfeld and Taylor (2004), as a lack of ways to finance current account deficits, i.e. a lack of global (respectively regional) financial integration. The region appears to be much less integrated than the EU15 or the ASEAN+3 groups, although it fares well compared to other LDCs.

Finance --- Business & Economics --- Money --- Macroeconomics. --- Caribbean Area --- Economic policy. --- Funding --- Funds --- Economics --- Currency question --- Exports and Imports --- Finance: General --- Investments: Stocks --- Current Account Adjustment --- Short-term Capital Movements --- Financial Aspects of Economic Integration --- International Financial Markets --- General Financial Markets: General (includes Measurement and Data) --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- International economics --- Investment & securities --- Financial integration --- Stock markets --- Stocks --- Current account --- Regional integration --- Financial markets --- Financial institutions --- Balance of payments --- Economic integration --- International finance --- Stock exchanges --- International economic integration --- Trinidad and Tobago

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We show that, in a monetary equilibrium, trade and asset prices depend on both the supply of the liquidity by the Central Bank and the liquidity of assets and commodities. As a result, monetary aggregates are informative for the conduct of monetary policy. We also show asset prices are higher in liquidity-constrained states of nature. This generates a term premium even in absence of aggregate uncertainty. These results hold in any monetary economy with heterogeneous agents and short-term liquidity effects, where monetary costs act as transaction costs and the quantity theory of money is verified.

Transaction costs. --- Externalities (Economics) --- Cost --- Right of property --- Costs, Social --- External economies and diseconomies --- External effects (Economics) --- Social costs --- Economics --- Public goods --- Waste (Economics) --- Welfare economics --- Banks and Banking --- Investments: Commodities --- Finance: General --- Macroeconomics --- Money and Monetary Policy --- Interest Rates: Determination, Term Structure, and Effects --- Price Level --- Inflation --- Deflation --- Portfolio Choice --- Investment Decisions --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Commodity Markets --- Finance --- Monetary economics --- Investment & securities --- Asset prices --- Liquidity --- Monetary base --- Commodities --- Short term interest rates --- Prices --- Money supply --- Commercial products --- Interest rates

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While progress has been made in increasing female labor force participation (FLFP) in the last 20 years, large gaps remain. The latest Fund research shows that improving gender diversity can result in larger economic gains than previously thought. Indeed, gender diversity brings benefits all its own. Women bring new skills to the workplace. This may reflect social norms and their impact on upbringing and social interactions, or underlying differences in risk preference and response to incentives for example. As such, there is an economic benefit from diversity, that is from bringing women into the labor force, over and above the benefit resulting from more (male) workers. The study finds that male and female labor are imperfect substitutes in production, and therefore gender differences in the labor force matter. The results also imply that standard models, which ignore such differences, understate the favorable impact of gender inclusion on growth, and misattribute to technology a part of growth that is actually caused by women's participation. The study further suggests that narrowing gender gaps benefits both men and women, because of a boost to male wages from higher FLFP. The paper also examines the role of women in the process of sectoral reallocation from traditional agriculture to services and the resulting effect on productivity and growth. Because FLFP is relatively high in services, sectoral reallocation along development paths serves to boost gender parity and productivity.

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The U.S. business cycle typically leads the European cycle by a few quarters and this can be used to forecast euro area GDP. We investigate whether financial variables carry additional information. We use vector autoregressions (VARs) which include the U.S. and the euro area GDPs as a minimal set of variables as well as growth in the Rest of the World (an aggregation of seven small countries) and selected combinations of financial variables. Impulse responses (in-sample) show that shocks to financial variables influence real activity. However, according to out-of-sample forecast exercises using the Root Mean Square Error (RMSE) metric, this macro-financial linkage would be weak: financial indicators do not improve short and medium term forecasts of real activity in the euro area, even when their timely availability, relative to GDP, is exploited. This result is partly due to the 'average' nature of the RMSE metric: when forecasting ability is assessed as if in real time (conditionally on the information available at the time of the forecast), we find that models using financial variables would have been preferred, ex ante, in several episodes, in particular between 1999 and 2002. This result suggests that one should not discard, on the basis of RMSE statistics, the use of predictive models that include financial variables if there is a theoretical prior that a financial shock is affecting growth.

Business & Economics --- Economic Theory --- Business cycles --- Economic indicators --- Business indicators --- Indicators, Business --- Indicators, Economic --- Leading indicators --- Economic cycles --- Economic fluctuations --- Economic history --- Quality of life --- Economic forecasting --- Index numbers (Economics) --- Social indicators --- Cycles --- Banks and Banking --- Econometrics --- Finance: General --- Statistics --- Industries: Financial Services --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- General Financial Markets: General (includes Measurement and Data) --- Interest Rates: Determination, Term Structure, and Effects --- Data Collection and Data Estimation Methodology --- Computer Programs: Other --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Finance --- Econometrics & economic statistics --- Vector autoregression --- Stock markets --- Yield curve --- Financial statistics --- Loans --- Stock exchanges --- Interest rates --- United States