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The six Middle Eastern Gulf countries, comprising Bahrain, the Kingdom of Saudi Arabia, Kuwait, Oman, Qatar and the United Arab Emirates (UAE) are contemplating, and experimenting with, many varieties of economic integration. The question arises whether they form an optimum currency area. The traditional approach deals with the real side of the economy, such as factor mobility, wage and price flexibility, the size and concentration of intraregional trade, the presence of different inflation/unemployment trade-offs, the elimination of transaction costs and better informational content of prices. The approach in this article is different and dwells upon the financial and monetary sides. The article studies whether there are long-run empirical, stable and parsimonious money demand functions (MDF) within each of these six countries. In addition, a panel long-run MDF is estimated. The results will determine whether the loss of an important tool of economic stabilisation in a monetary union, which is monetary policy, is compensated by a more effective fiscal policy. The article concludes that a monetary union is not commendable, unless fiscal restraints are applied thoroughly on all the six countries involved.

Investments with random cash flow streams are much closer to describe the real financial environment of a revenue generating investment than constant cash flow streams .A cash flow stream is considered under risk if at least one of its parameters is a random variable with a given probability distribution. Many models of random cash flows were investigated by researchers. However, this study aims to survey the economic worth of cash flows with random time between equal returns on the initial investment. This study develops criteria for the profitability based on the rate of return of the expected net present worth, and make comparisons to the expected rate of return based on simulations. The concept of moment generating functions of random variables is employed to get the analytic forms of the expectations. This study also considers many possible distributions for the random separating time between returns and supply a sufficient number of numerical examples. The findings show that this financial model applies to apartment buildings, condominiums, shopping malls, and the management of inventory stocks of expensive items.

The economic feasibility of apartment building complexes is mainly done by using one of the economic analysis methods: present worth, future worth, annual worth, rate of return, or benefit-cost ratio. The cash-flow used is based on the assumption that a certain fraction of the apartments will be sold during the construction period, and the rest equally sold annually over a certain period of time. This model may work sometimes, but its estimated profitability is inaccurate. The actual cash-flow to be used is stochastic. In this paper, we shall use a cash-flow with random separation time between successive sales of apartments after the construction period. We shall find a compact form of the expected present worth, and determine a range for the annual discount rate so that the project is profitable.

The economic rate of return (ERR) is a measure of the profitability of a revenue generating investment based on a single external discount rate which is the hurdle rate or the minimum attractive rate of return (MARR). In this paper, we will highlight on the practical and reasonable interpretation of the (ERR) as a reinvestment rate of the present worth of costs. We shall give the usual mathematical definition of the (ERR) and derive an alternative, more useful, and applicable definition in terms of the benefit-cost ratio. We will also investigate the behavior of the (ERR) function in terms of the (MARR) as a variable. A relationship between the (ERR) and the internal rate of return (IRR) will be established. Finally, the applicability of the (ERR) method as an economic analysis method will be demonstrated.