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on Arab World |
| By: | Selim Elekdag; Harun Alp |
| Abstract: | Turkey is an interesting case study because it was one of the hardest hit emerging economies by the global financial crisis, with a year-over-year contraction of 15 percent during the first quarter of 2009. At the same time, anticipating the fallout from the crisis, the Central Bank of the Republic of Turkey (CBRT) decreased policy rates by an astounding 1025 basis points over the November 2008 to November 2009 period. In this context, this paper addresses the following broad question: If an inflation targeting framework underpinned by a flexible exchange rate regime was not adopted, how much deeper would the recent recession have been? Counterfactual experiments based on an estimated structural model provide quantitative evidence which suggests that the recession would have been substantially more severe. In other words, the interest rate cuts implemented by the CBRT and exchange rate flexibility both helped substantially soften the impact of the global financial crisis. |
| Date: | 2011–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/150&r=ara |
| By: | Tahsin Saadi Sedik; Oral Williams |
| Abstract: | This paper analyzes the impact of global and regional spillovers to GCC equity markets. GCC equity markets were impacted by spillovers from U.S. equity markets despite varying degrees of foreign participation. Spillovers from regional equity markets were also important but the magnitude of the effects were on average smaller than that from mature markets. The results also illustrated episodes of contagion in particular during the recent global financial crisis. The findings suggest that given the degree of openness, and open capital accounts the financial channel is an important source through which volatility is transmitted. In this regard, GCC equity markets are not immune from global and regional financial shocks. These findings refute the notion of decoupling between the GCC equity and global equity markets. |
| Keywords: | Cooperation Council for the Arab States of the Gulf , Economic integration , Economic models , External shocks , Regional shocks , Spillovers , Stock markets , United States , |
| Date: | 2011–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/138&r=ara |
| By: | Serhan Cevik |
| Abstract: | Using the cyclically adjusted non-hydrocarbon primary balance, this paper investigates the evolution of the fiscal policy stance in the United Arab Emirates at consolidated and sub-national levels in the run-up and after the crisis. The empirical findings show that procyclical fiscal policies prior to the crisis reinforced the financial sector cycle, exacerbated the economic upswing, and thereby contributed to the build-up of macro-financial vulnerabilities. The paper also sets out policy lessons to develop a rule-based fiscal framework that would help strengthen fiscal policy coordination between the various layers of government and ensure long-term fiscal sustainability and a more equitable intergenerational distribution of wealth. |
| Keywords: | Business cycles , Debt sustainability , Fiscal policy , Fiscal sustainability , Hydrocarbons , Public debt , United Arab Emirates , |
| Date: | 2011–06–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/147&r=ara |
| By: | Lochner, Stefan (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Dieckhoener, Caroline (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | The uprising and military confrontation in Libya that began in February 2011 has led to disruptions of gas supplies to Europe. An analysis of how Europe has compensated for these missing gas volumes shows that this situation has not affected security of supply. <p> However, this situation would change if the North African uprising were to spread to Algeria. Since Algeria is a much more important gas supplier to Europe than is Libya, more severe consequences would be likely. Applying a natural gas infrastructure model, we investigate the impact of supplier disruptions from both countries for a summer and winter period. Our analysis shows that disruptions in the low-demand summer months could be compensated for, mainly by <p> LNG imports. An investigation of a similar situation at the beginning of the winter shows that security of supply would be severely compromised and that disruptions to Italian consumers would be unavoidable. |
| Keywords: | Natural gas; security of supply; network modelling; North Africa |
| JEL: | C61 L95 Q34 Q41 |
| Date: | 2011–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2011_001&r=ara |