nep-ara New Economics Papers
on Arab World
Issue of 2009‒10‒24
five papers chosen by
Quentin Wodon
World Bank

  1. Equity Price Bubbles in the Middle Eastern and North African Financial Markets By Jahan-Parvar, Mohammad; Waters, George
  2. Oil Exports and the Iranian Economy By Esfahani, H.S.; Mohaddes, K.; Pesaran, M.H.
  3. Identity and Islamic Radicalization in Western Europe By S Mansoob Murshed; Sara Pavan
  4. Determinants of Integration and Its Impact on the Economic Success of Immigrants: A Case Study of the Turkish Community in Berlin By Alexander M. Danzer; Hulya Ulku
  5. An Empirical Analysis of the Gender Gap in Mathematics By Roland G. Fryer, Jr; Steven D. Levitt

  1. By: Jahan-Parvar, Mohammad; Waters, George
    Abstract: We empirically investigate the existence of periodically collapsing bubbles in seven Middle East and North African (MENA) financial markets for the period ending in May 2009. We use the Taylor and Peel (1998) residual augmented least square Dickey and Fuller test (RALS DF) to detect the bubbles. We find that the hypothesis of a bubble formation cannot be rejected for all seven markets investigated in our study, leading us to believe that in fact there has been a break down in the cointegration relationship between real equity prices and real dividends and also between real market capitalizations and real dividends.
    Keywords: Cointegration; Equity prices; Explosive unit root processes; MENA; Periodically collapsing bubbles.
    JEL: G12 G15 C22
    Date: 2009–10
  2. By: Esfahani, H.S.; Mohaddes, K.; Pesaran, M.H.
    Abstract: This paper develops a long run growth model for a major oil exporting economy and derives conditions under which oil revenues are likely to have a lasting impact. This approach contrasts with the standard literature on the "Dutch disease" and the "re- source curse", which primarily focus on short run implications of a temporary resource discovery. Under certain regularity conditions and assuming a Cobb Douglas production function, it is shown that (log) oil exports enter the long run output equation with a coeficient equal to the share of capital. The long run theory is tested using a new quarterly data set on the Iranain economy over the period 1979Q1-2006Q4. Building an error correction specification in real output, real money balances, inflation, real exchange rate, oil exports, and foreign real output, the paper finds clear evidence for two long run relations: an output equation as predicted by the theory and a standard real money demand equation with inflation acting as a proxy for the (missing) market interest rate. Real output in the long run is shaped by oil exports through their impact on capital accumulation, and the foreign output as the main channel of technological transfer. The results also show a significant negative long run association between inflation and real GDP, which is suggestive of economic ineficiencies. Once the effects of oil exports are taken into account, the estimates support output growth convergence between Iran and the rest of the world. We also find that the Iranian economy adjusts quite quickly to the shocks in foreign output and oil exports, which could be partly due to the relatively underdeveloped nature of Iran's financial markets.
    Keywords: Growth models, long run relations, Iranian economy, oil price and foreign output shocks, and error correcting relations
    JEL: C32 C53 E17 F43 F47 Q32
    Date: 2009–10–15
  3. By: S Mansoob Murshed (Institute of Social Studies); Sara Pavan (Institute of Social Studies)
    Abstract: This paper argues that both socio-economic disadvantage and political factors, such as the West’s foreign policy with regard to the Muslim world, along with historical grievances, play a part in the development of Islamic radicalized collective action in Western Europe. We emphasise the role of group identity based individual behaviour in organising collective action within radicalized Muslim groups. Inasmuch as culture plays any role at all in radicalization, it is because individuals feel an imperative to act on the basis of their Muslim identity, something to which different individuals will attach varying degrees of salience, depending on how they place their Muslim identity based actions in the scheme of their multiple identities. We also emphasize the role of the opportunistic politician, from the majority European community, in fomenting hatred for Muslims, which also produces a backlash from radicalized political Islam. We present comparative evidence on socio-economic, political and cultural disadvantage faced by Muslim minorities in five West European countries: Germany, the UK, France, Spain and the Netherlands.
    Keywords: Peacekeeping; Identity, Radicalization, Clash of civilizations, Terrorism
    Date: 2009
  4. By: Alexander M. Danzer; Hulya Ulku
    Abstract: Using new data on 590 Turkish households in Berlin, we investigate the determinants and impact of integration on economic performance. We find that the usual suspects, such as time spent in Germany and education, have positive impact, while networks have no impact on integration. There is strong evidence that political integration and the degree of full integration promote income. Using endogenous switching regression models, we show that local familial networks increase the income of unintegrated migrant groups only, while transnational networks decrease it. We also find that education is more welfare-improving for integrated than non-integrated immigrants.
    Date: 2009
  5. By: Roland G. Fryer, Jr; Steven D. Levitt
    Abstract: We document and analyze the emergence of a substantial gender gap in mathematics in the early years of schooling using a large, recent, and nationally representative panel of children in the United States. There are no mean differences between boys and girls upon entry to school, but girls lose more than two-tenths of a standard deviation relative to boys over the first six years of school. The ground lost by girls relative to boys is roughly half as large as the black-white test score gap that appears over these same ages. We document the presence of this gender math gap across every strata of society. We explore a wide range of possible explanations in the U.S. data, including less investment by girls in math, low parental expectations, and biased tests, but find little support for any of these theories. Moving to cross-country comparisons, we find that earlier results linking the gender gap in math to measures of gender equality are sensitive to the inclusion of Muslim countries, where in spite of women’s low status, there is little or no gender gap in math.
    JEL: I20
    Date: 2009–10

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