Growth Dynamics in Qatar: Short-Run Volatility and Long-Run Stability under Monetary and Inflation Shocks

Growth Dynamics in Qatar: Short-Run Volatility and Long-Run Stability under Monetary and Inflation Shocks | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Growth Dynamics in Qatar: Short-Run Volatility and Long-Run Stability under Monetary and Inflation Shocks Hassan Tawakol Ahmed Fadol This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7566086/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Purpose: This study investigates the short-run volatility and long-run stability of Qatar’s economic growth under monetary and inflationary shocks during the period 1980–2024. The analysis focuses on the role of inflation, money supply, real interest rates, and foreign direct investment (FDI) in shaping growth dynamics. Methods The study applies the Autoregressive Distributed Lag (ARDL) bounds testing procedure to examine cointegration, followed by the Error Correction Model (ECM) to capture short-run adjustments. Impulse response functions (IRFs) are employed to trace the dynamic responses of growth to monetary and inflationary shocks. Results Findings reveal that inflation and money supply exert marginal but adverse effects on long-run growth, while FDI significantly enhances long-term expansion. Real interest rates, although contractionary in the short run, contribute positively to growth in the long run by improving capital allocation. Short-run dynamics exhibit oscillatory responses, particularly in inflation and FDI, highlighting Qatar’s vulnerability to both external and domestic shocks. Implications The results suggest that sustaining long-term resilience requires prudent inflation management, calibrated liquidity expansion, and stable FDI inflows. Policymakers should balance short-run stabilization measures with structural reforms that strengthen the economy’s capacity to absorb shocks while maintaining steady growth. JEL Classification: C32, E31, E44, F43, O47 Econometrics Macroeconomics Development Economics Economic Theory Growth Dynamics Monetary Shocks Inflation FDI ARDL ECM Full Text Additional Declarations The authors declare no competing interests. Supplementary Files QUARQATAR.xlsx Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. 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The analysis focuses on the role of inflation, money supply, real interest rates, and foreign direct investment (FDI) in shaping growth dynamics.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eMethods\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe study applies the Autoregressive Distributed Lag (ARDL) bounds testing procedure to examine cointegration, followed by the Error Correction Model (ECM) to capture short-run adjustments. Impulse response functions (IRFs) are employed to trace the dynamic responses of growth to monetary and inflationary shocks.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eResults\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eFindings reveal that inflation and money supply exert marginal but adverse effects on long-run growth, while FDI significantly enhances long-term expansion. Real interest rates, although contractionary in the short run, contribute positively to growth in the long run by improving capital allocation. Short-run dynamics exhibit oscillatory responses, particularly in inflation and FDI, highlighting Qatar’s vulnerability to both external and domestic shocks.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eImplications\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThe results suggest that sustaining long-term resilience requires prudent inflation management, calibrated liquidity expansion, and stable FDI inflows. 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