nep-ara New Economics Papers
on Arab World
Issue of 2010‒08‒14
four papers chosen by
Quentin Wodon
World Bank

  1. Identification of ‘pull’ & ‘push’ factors for the portfolio flows: SVAR evidence from the Turkish economy By Korap, Levent
  2. Impact of global economic imbalance on migrant workers and economies of the Gulf Cooperation Council By Marzovilla, Olga
  3. In Time of Troubles: Challenges and Prospects in the Middle East and North Africa By Imed Drine
  4. A Composite Leading Indicator of Tunisian Inflation By Mohamed Daly Sfia

  1. By: Korap, Levent
    Abstract: In this paper, the determinants of the portfolio based capital flows are examined for the Turkish economy. Following the structural vector autoregression methodology, the estimation results reveal that the ‘push’ factors based on the external developments for the Turkish economy have a dominant role in explaining the behavior of the portfolio flows. Further, the domestic real interest rate as one of the main ‘pull’ factors has been found in a negative dynamic relationship with the portfolio flows. This result is attributed to that the dynamic course of the portfolio flows should not be related to the excess return possibilities of the real interest structure of the Turkish economy.
    Keywords: Portfolio Flows; SVAR Analysis; Turkish Economy;
    JEL: C32 G11 F32
    Date: 2010
  2. By: Marzovilla, Olga
    Abstract: GCC Countries are characterized by a high incidence of foreigners on both the overall population and the labour force as well as by deep inequalities in social and economic term. These features have influenced the labour market and fuelled mutual tensions and grievances between nationals and foreigners. Consequently, these Countries need to reconcile the demands of economic growth with those of social stability. The latter requires a more equitable allocation of rights and duties along with not only more effective actions in terms of human rights, but also more stable economic dynamics, that prevents the redistributive effects of inflation. The anti-inflationary objective is a priority for Gulf Countries, which entails not only countering the effects, but also removing the causes of inflation. The experience of the new millennium showed that the dollar peg, which characterizes the exchange rate regime of the GCC Countries, was a major vehicle of inflation for Gulf economies and suggests the advisability for its amendment. The alternative proposed in this article is to adopt a basket peg system whereby national currencies could be anchored to a basket of strong currencies that mirror direction and intensity of commercial and financial flows on the international market.
    Keywords: GCC countries; exchange rate regimes; basket peg; dollar peg; inflation; migration; labour market
    JEL: F22 F32 E31 F33 F31
    Date: 2010–05–25
  3. By: Imed Drine
    Abstract: The recent crises concerning food and finances highlight the extreme fragility of the MENA countries and question the sustainability of the development processes. The social stress and economic instability caused by these challenges give a good indication of what might be expected in the future. This paper intends to provide a comprehensive analysis for understanding the major challenges faced by the region and the kind of internal impediments that will need to be dealt with in order to achieve a higher level of economic development and more resilience to external shocks.
    Keywords: MENA region, Economic Fragility
    JEL: O1 N2
    Date: 2010–04–01
  4. By: Mohamed Daly Sfia
    Abstract: This paper investigates the possibility of constructing a composite leading indicator (CLI) of Tunisian inflation. For doing so, partial information about future inflation rate provided by a number of basic series is analyzed first. Based on the correlation analysis, a few of these basic series are chosen for construction of composite indicator. Empirical results show that the deviation from long‐term trend of two monetary aggregates (M1 and M3), short‐term interest rate (TMM), real effective exchange rate and crude petroleum production, are important leading indicators for inflation rate in Tunisia. Accordingly, based on monthly data on these basic series, one composite indicator is constructed and its performance is assessed by using turning point analysis, granger causality tests, and impulse response functions. The results indicate that our composite indicator is useful in anticipating changes in inflation rates in Tunisia.
    Keywords: Tunisia, Inflation, Leading indicators, Composite index
    JEL: E31 E32 E37
    Date: 2010–03–01

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