nep-ara New Economics Papers
on Arab World
Issue of 2009‒10‒10
eleven papers chosen by
Quentin Wodon
World Bank

  1. Extreme Risk and Fat-tails Distribution Model:Empirical Analysis By Onour, Ibrahim
  2. An Alternative Explanation for the Resource Curse: The Income Effect Channel By Rabah Arezki; Ali Alichi
  3. Appraising the integration of sustainable development into sectoral policies: The case of Turkish Science & Technology policies By Erkan Erdil; Cédric Gossart
  4. Fiscal Policy Rules for Oil-Producing Countries: A Welfare-Based Assessment By Wojciech Maliszewski
  5. Oil Prices and Real Exchange Rate Volatility in Oil-Exporting Economies: The Role of Governance By Rickne, Johanna
  6. Power and temporal commitment preference: An investigation in Portugal, Turkey, and the United States By Sungu Armagan; Manuel Portugal Ferreira; Gerardo A. Okhuysen; Adam D. Galinsky
  7. Requirements for Using Interest Rates as an Operating Target for Monetary Policy:The Case of Tunisia By Alexandre Chailloux; Alain Durré; Bernard Laurens
  8. Lebanon-Determinants of Commercial Bank Deposits in a Regional Financial Center By Harald Finger; Heiko Hesse
  9. Establishing Conversion Values for New Currency Unions: Method and Application to the planned Gulf Cooperation Council (GCC) Currency Union By Bassem Kamar; Jean-Etienne Carlotti; Russell C. Krueger
  10. Post 9-11 U.S. Muslim Labor Market Outcomes By Rabby, Faisal; Rodgers III, William M.
  11. Gender differences in pay in African manufacturing firms By Christophe J. Nordman; François-Charles Wolff

  1. By: Onour, Ibrahim
    Abstract: This paper investigates estimation of extreme risk in a number of stock markets in the Gulf Cooperation Council (GCC) countries , Saudi, Kuwait, and United Arab Emirates, in addition to S& P 500 stock index, using the Generalized Pareto Distribution (GPD) model. The estimated tails parameter values for stock returns of Kuwait, Saudi, and Dubai, markets show the likelihood of significant extreme losses as well as significant extreme gains, compared to the case of more mature S&P 500 stock returns, which exhibit possibility of significant extreme losses with insignificant gain prospects.
    Keywords: VaR;Expected shortfall; risk;GCC stock markets
    JEL: C50 E00 E44
    Date: 2009–06–28
  2. By: Rabah Arezki; Ali Alichi
    Abstract: The paper provides an alternative explanation for the "resource curse" based on the income effect resulting from high government current spending in resource rich economies. Using a simple life cycle framework, we show that private investment in the non-resource sector is adversely affected if private agents expect extra government current spending financed through resource sector revenues in the future. This income channel of the resource curse is stronger for countries with lower degrees of openness and forward altruism. We empirically validate these findings by estimating non-hydrocarbon sector growth regressions using a panel of 25 oil-exporting countries over 1992-2005.
    Keywords: Capital accumulation , Capital flows , Cross country analysis , Domestic investment , Economic growth , Economic models , Fiscal policy , Government expenditures , Income , Natural resources , Private sector , Revenue sources ,
    Date: 2009–05–29
  3. By: Erkan Erdil (TEKPOL-STPS, Science and Technology Policy Studies, Middle East Technical University); Cédric Gossart (Institut TELECOM, TELECOM & Management SudParis, ETOS/CEMANTIC)
    Abstract: This paper presents the results of a study investigating how sustainable development can be integrated in Turkish science and technology policies. It contributes to the elaboration of the national sustainable development strategy and to the implementation of the EU acquis. The project’s originality for Turkey lies in its methodology (a participatory approach), and in its topic since sustainable development integration has never been dealt with in Turkey. Suggestions to improve this integration include strengthening the links between S&T institutions by entrusting the State Planning Organisation with the sustainable development integration mission, and raising awareness about its win-win advantages.
    Keywords: Science and technology policy, Sustainable development integration, Participatory public policy, Environment, Turkey
    Date: 2009–05
  4. By: Wojciech Maliszewski
    Abstract: The paper presents numerical simulations of various fiscal rules for oil-producing countries. Welfare implications are sensitive to the choice of the social welfare function, initial conditions, and non-oil growth prospects. The distribution of non-oil wealth is important for countries with relatively low oil reserves. Corrections for adjustment costs and uncertainty with respect to oil prices should be applied carefully. While avoiding sharp changes in the fiscal policy stance may be appealing, it is not necessarily optimal if the initial position is unsustainable. Ad hoc rules are shown to perform poorly. The analysis abstracts from several issues critical for developing a practical policy advice and should not be treated as a complete framework.
    Keywords: Debt sustainability , Economic growth , Economic models , Fiscal policy , Fiscal sustainability , Nonoil sector , Oil prices , Oil producing countries , Oil revenues , Welfare ,
    Date: 2009–06–12
  5. By: Rickne, Johanna (Research Institute of Industrial Economics (IFN))
    Abstract: Institutional and political characteristics affect the extent to which the real exchange rates of oil-exporting countries co-move with the oil price. In a simple theoretical model, good governance insulates real exchange rates from price volatility by generating a smoother pattern of fiscal spending over the resource price cycle. Empirical tests on a panel of 33 oil-exporting countries provide evidence that countries with high bureaucratic quality, strong and impartial legal systems, democratic governing systems, and more equal income distributions have real exchange rates which co-move less with the oil price.
    Keywords: Real Exchange Rate; Commodity Price; Governance; Cross-country Regression; Development
    JEL: F31 H11 Q48
    Date: 2009–09–23
  6. By: Sungu Armagan (College of Business Administration - Florida International University); Manuel Portugal Ferreira (Instituto Politécnico de Leiria); Gerardo A. Okhuysen (University of Utah); Adam D. Galinsky (Kellogg School of Management - Northwestern University)
    Abstract: The current research explores the impact of power on temporal commitment preference (an individual?s preference for shorter or longer time durations for agreements in decision making situations) across three countries: Portugal, Turkey, and the United States. A pilot study (N = 356) established cultural differences in uncertainty avoidance, which was expected to impact choices and behaviors involving power and temporality. The main study (N = 433) investigated the relationship between power and temporal commitment preference. Across all countries, high power individuals preferred shorter temporal commitments than low power individuals. In addition, the U.S. participants preferred longer temporal commitments than either the Portuguese or Turkish participants. We argue that differences in uncertainty avoidance help explain some of the differences in individuals? temporal commitment preferences across diverse cultural settings. Implications for practice and future directions are also discussed.
    Keywords: Power, Time, National culture, Uncertainty avoidance
    JEL: M0 M1
    Date: 2009–09–25
  7. By: Alexandre Chailloux; Alain Durré; Bernard Laurens
    Abstract: This paper discusses the use of interest rates as the operating target for monetary policy in Tunisia and the roadmap for establishing the other building blocks of an inflation targeting framework. It argues that strengthening the effectiveness of the current monetary policy framework will facilitate the adoption of inflation targeting over time.
    Keywords: Economic models , Economic reforms , Financial sector , Inflation targeting , Interest rates , Liquidity management , Monetary operations , Monetary policy , Money markets , Tunisia ,
    Date: 2009–07–16
  8. By: Harald Finger; Heiko Hesse
    Abstract: This paper empirically examines the demand for commercial bank deposits in Lebanon, a regional financial center. With Lebanon's high fiscal deficits financed largely by domestic commercial banks that rely on deposit funding, deposit growth is a key variable to assess government financing conditions. At the macro level, we find that domestic factors such as economic activity, prices, and the interest differential between the Lebanese pound and the U.S. dollar are significant in explaining deposit demand, as are external factors such as advanced economy economic and financial conditions and variables proxying the availability of funds from the Gulf. Impulse response functions and variance decomposition analyses underscore the relative importance of the external variables. At the micro level, we find that in addition, bank-specific variables, such as the perceived riskiness of individual banks, their liquidity buffers, loan exposure, and interest margins, bear a significant influence on the demand for deposits.
    Keywords: Bank soundness , Banking sector , Commercial banks , Demand for money , Depositories , Economic models , Financial systems , Lebanon , Liquidity , Profits ,
    Date: 2009–09–14
  9. By: Bassem Kamar; Jean-Etienne Carlotti; Russell C. Krueger
    Abstract: A key issue in creating a new currency union is setting the rates to convert national currencies into the new union currency. Planned unions in the Gulf region and Africa are seeking methods to set the conversion rates when their new currencies are created. We propose a forward-looking econometric methodology to determine conversion rates by calculating the degree of misalignment in the real exchange rate, and apply it to the GCC currency union. For each GCC currency, we identify the year at which the economy is the closest to its internal and external equilibrium, and then estimate the degree of misalignment in the bilateral real exchange rate vis-à-vis the U.S. dollar based on WEO forecasts until 2013. Application of the methodology to other regions is also considered.
    Keywords: Convertibility , Convertible currencies , Currencies , East Africa , Economic models , Exchange rate determination , Exchange rates , Monetary unions , Real effective exchange rates , West Africa ,
    Date: 2009–08–31
  10. By: Rabby, Faisal (Missouri State University); Rodgers III, William M. (Rutgers University)
    Abstract: Using a difference-in-differences framework and micro data from the Current Population Survey-Merged Outgoing Rotation Group Files (1999 to 2004), this paper estimates the impact that the 9-11 terrorists attacks had on the U.S. labor market outcomes of individuals with nativity profiles similar to the terrorists. We find that shortly after the attacks, the employment-population ratios and hours worked of very young (ages 16 to 25) Muslim men fell. By 2004, most losses had begun to dissipate. The employment-population ratios and hours worked of older Muslim men experienced little deterioration.
    Keywords: muslim, 9/11, labor market outcomes, immigrant workers
    JEL: J15 J61 J71
    Date: 2009–09
  11. By: Christophe J. Nordman (DIAL - Développement, institutions et analyses de long terme - IRD : UR047); François-Charles Wolff (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: Using matched employer-employee data collected in seven African countries, we present comparative evidence on the magnitude of the gender wage gap in African manufacturing sectors. Using OLS regressions, differences in male and female earnings are found both in Mauritius and Morocco, while the gender wage gap turns out to be insignificant in Benin, Kenya, Madagascar, Senegal and Uganda. Results from quantile regressions indicate that the wage gap remains not constant across the wage distribution. Finally, we study the role of firm characteristics and job segregation across firms as potential factors explaining the gender wage gaps.
    Date: 2009

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