Abstract
<title>Abstract</title> <p>This paper investigates whether the effects of government debt, trade openness, and oil prices on inflation in the Gulf Cooperation Council (GCC) countries during the period 1980–2024 are symmetric or asymmetric, and if these relationships are influenced by play external shocks in shaping inflation dynamics. The study utilizes Panel Autoregressive Distributed Lag (PARDL) and Panel Nonlinear ARDL (PNARDL) models to examine both short-run and long-run dynamics accompanied by stationarity and co-integration test to confirm the robustness of estimations, while IS bootstrap causality test is applied to detect the direction and crisis-sensitivity of the nexus among variables. The findings indicate that government debt, trade openness and oil prices have statistically and economically significant and asymmetric impact on inflation, where positive shocks in trade openness induce higher inflationary pressures than negative shocks. The error correction term indicates the presence of a stable long-run equilibrium, suggesting a convergence in transitory deviations. Moreover, bidirectional and crisis-sensitive linkages are indicated from causality results, especially in the major global perturbations like the financial crisis of 2007–2008 and the COVID-19 pandemic. Although the analysis is confined to the GCC countries and this may limit the applicability of the results, it offers useful policy implications by signaling the necessity of having fiscal and monetary regimes that consider asymmetries and external vulnerabilities. In addition, they signal the relevance of tackling structural imbalances and shielding households from non-uniform inflationary consequences linked with debt accumulation, trade openness and oil price volatility, in shaping macroeconomic policies that are more robust and better able to adapt. JEL classification: E62, E31, E32, C33</p>