To What Extent GDP, Trade and Cost of Transport are Interdependent in GCC Countries? Unrestricted VAR Approach

This paper aims to analyze the interdependencies among GDP, trade, and cost of transport. For this purpose, the study tested a 360 cointegrated stationary observation for the GCC countries over the period 2000 to 2010. The results revealed that a high alternate adverse interdependence is only between GDP and cost of transport. While a shock of GDP has led to a parallel impact on the level of foreign trade and vice versa, in which the economic growth is significantly contributing in the variance of trade.