THE IMPACT OF THE 2008 OIL PRICE COLLAPSE ON KUWAIT GDP 2008-2012: AN ESTIMATION BASED ON STOCHASTIC LOGISTICAL METHODS

In this paper we utilize a stochastic differenced logistic process to model the annualized Kuwaiti GNPfor the years2002 to 2012 incorporating the world oil price collapse that occurred in the third quarter of 2008 late 2009 .The fitted stochastic differenced logistic model is then used to investigate the properties and behaviour ofKuwait real GDP given the impact of the 2008 price crash on short run economic growth.The derived stochastic differenced logisticaloutput is shown to be robust in terms of goodness of fit, capturing the jumpeffect of the oil price collapse on the real GDP .This approach is unique in estimating oil price shock effects on the GDP for oil export dependent economies. Finally, the approach delivers robust estimation parameters passing standard diagnostic tests.