The financial crisis of 2008 initiated itself as a crisis in the housing segment of the United States and then spread rapidly across most of the world, although some economies were more vulnerable than others. It engulfed advanced economies, emerging markets and various other countries alike. Even the oil-rich gulf countries, with their massive oil revenues and large sovereign funds were not immune to the impacts of this external shock.

This study analyzes the impact of the crisis of 2008 on the short-term macroeconomic outlook of the GCC countries and measures the damage caused to the region due to this external shock. It suggests that while aiming for the benefits of financial integration, they would have to bear the risk of being vulnerable to the contagious effects due to such financial integration. Moreover, the research emphasizes the importance of the financial sector for their economic stability and growth.

Keywords: Financial crisis 2008, GCC countries, contagion, quantitative impact, vulnerability to external crisis, financial stress

Suggested citation: Ronak, Z.(2015).An empirical analysis of the vulnerability of the GCC countries to the financial crisis of 2008.Skyline Business Journal, Volume  11, No 1,pp 72-88.

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