What is the effect of oil prices change on stock market of GCC Assignment

What is the effect of oil prices change on stock market of GCC countries - Assignment Example Of the seven countries, Qatar is the most sensitive to changes in oil prices and often responds in a quicker manner as compared to the others. The main objective of this paper is to discuss the effects of oil price changes on the Stock market of GCC countries. Over the last three decades, the drop in oil prices in the second half of 2014 qualifies as a noteworthy occurrence as compared to other episodes within that time. Between 1984 and 2013, there were five major declines in oil prices (Arouri, 2010). Notably, there were 30 percent or more price decreases within a period of six months. These declines in oil prices coincided with significant changes in oil markets and the global economy including; the increase in oil supplies and change in the OPEC policy, U.S recession, Asian crisis and the worldwide financial crisis of 1986, 1990, 1997 and 2007 respectively (Arouri, 2010). Interestingly, the latest episode of collapse in oil prices bears remarkable parallels with the1985-86 collapse. Saudi Arabia amended its policy in December 1985 leading to a 61 percent decline in the oil prices. Between January and July 1986, oil prices dropped from $24.68 to $9.62 per barrel and prevailed for more than a decade (Arouri, 2010). A repeat of this phenomenon was observed after the steep decline in oil prices intensified in the second half of 2014 following a policy alteration by Saudi Arabia in November 2013. Cumulatively, the decline in oil prices, from the peak that was experienced in 2011, became larger than that experienced in non-oil commodity prices. With this regard, oil prices affect the major economic variables of Oil producing countries, as well as, the stock returns of these involved countries (Arouri, 2010). The GCC is comprised of six countries including Qatar, Kuwait, Saudi Arabia, Kuwait, Bahrain and the United Arab Emirates. In 2007, these countries possessed about 47 % of oil reserves, produced 20% of oil in the

Education level vs. GDP per capital (Analysis) Essay

Education level vs. GDP per capital (Analysis) - Essay Example From the table above, there is less than 5 years of elementary school and the GDP are perfectly negatively correlated. There is a relatively strong correlation between 4 or more years of college and GDP per capita than there is between high school completion or higher and the GDP per capita. This means that those who have less than 5 years elementary education contribute less to the country’s GDP per capita as compared to high school completion and 4 or more years of college. The longer one takes in learning, the higher they contribute to the GDP per capita. From the regression analysis output above, the equation of the model is y = -1129498.874 +583.606*Year. This is to show that there is a significant relationship between the GDP and the education level as years spent in school is part of the model formula. Based on the four years moving average of the country’s gdp above, it is healthy to assume that the country’s GDP is improving exponentially over the years with the forecasted GDP almost meeting the actual GDP (Corder, &, Foreman, 35) Even though the data provides that there is a strong correlation between education level and the gdp, IT is imperative to note that the GDP as it is, is a wide econometric term used to refer to a number of variables. Therefore, the relationship between the educational levels and the GDP may be assumed correct in the light of the data but not in real life scenarios. One is likely to realize that the GDP alone to be strongly correlated to the other macroeconomic factors than just educational level. It is therefore important to conduct anon parametric analysis on the other variable before making a concrete conclusion (Spearman,