Currency depreciation reduces aggregate supply by raising cost of imported inputs and increases aggregate demand by increasing its net export component. Depending on the relative strength of the two effects, depreciation could be expansionary or contractionary. We employ the bounds testing...

Purpose: Given the persistence of low oil prices and the continued shrinking of government revenues, Gulf Cooperation Council (GCC) countries continue to adapt to the new normal of the oil price environment, with a focus on pressing ahead with subsidies’ reforms and measures to increase...