nep-ara New Economics Papers
on Arab World
Issue of 2011‒08‒22
five papers chosen by
Quentin Wodon
World Bank

  1. The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey By Serhan Cevik; Joshua Charap
  2. Islamic house financing: Current models and a proposal from social perspective By Hasan, Zubair
  3. Comparative Essay on Returns to Education in Palestine and Turkey By Aysit Tansel; Yousef Daoud
  4. Inflation Inertia in Egypt and its Policy Implications By Kenji Moriyama
  5. Iran - The Chronicles of the Subsidy Reform By Mohammad Reza Farzin; Dominique M. Guillaume; Roman Zytek

  1. By: Serhan Cevik; Joshua Charap
    Abstract: This paper examines the empirical behavior of conventional bank deposit rates and the rate of return on retail Islamic profit-and-loss sharing (PLS) investment accounts in Malaysia and Turkey, using monthly data from January 1997 to August 2010. The analysis shows that conventional bank deposit rates and PLS returns exhibit long-run cointegration and the time-varying volatility of conventional bank deposit rates and PLS returns is correlated and is statistically significant. The pairwise and multivariate causality tests show that conventional bank deposit rates Granger cause returns on PLS accounts. These findings have policy implications in terms of price stability and financial stability.
    Keywords: Banking , Cross country analysis , Interest rates , Islamic banking , Malaysia , Profit margins , Turkey ,
    Date: 2011–07–06
  2. By: Hasan, Zubair
    Abstract: This brief note supplements the argument of an earlier paper Islamic Home Financing: Current Models and a Proposal from Social Perspective”; it explains that the Diminishing Balance Model for Islamic home financing is operable in a Shari’ah compliant way even without the Islamic Banking laws accommodating the notion of constructive ownership as envisaged earlier. It further clarifies how the new model scores over the models currently being used for the purpose.
    Keywords: Key words: Islamic home finance; interest based model; MMP model; Diminishing Balance model
    JEL: D14 G21
    Date: 2011–08–10
  3. By: Aysit Tansel (Middle East Technical University and Economic Research Forum (ERF) Cairo, Egypt); Yousef Daoud (Birzeit University Palestine and Economic Research Forum (ERF) Cairo, Egypt)
    Abstract: This study exposes a comparative treatment of the private returns to education in Palestine and Turkey over the period 2004-2008. Comparable data, similar definitions and same methodology are used in the estimations. The estimates are provided first for average returns to education second for returns at different levels of schooling and finally for returns by different sectors of employment. The results suggest that returns to schooling are higher for Turkey at the various levels of education for females and males and for both years 2004 and 2008. It is believed that the relative size of the Palestinian economy and the uniqueness of subjugation to military occupation contribute greatly to this result. In 2008, returns are lower than 2004 levels for all levels of education; the pattern is less obvious for Turkey across the various levels. However, the 2008 crisis seems to have influenced the more educated more severely (MA and above) in both countries. Female returns to education are higher for women than men in both countries; the gender gap has worsened in 2008, but more so for Palestine. The median ratio of male to female return is 0.55 (university) in 2004 and decreased to 0.17 (high school) in 2008 in Palestine. The corresponding figures for Turkey are 0.79 and .082 (both for high school). Finally, it was found that the selectivity corrected return estimates are lower than the OLS estimates in Palestine while they are higher than the OLS estimates in Turkey.
    Keywords: Returns to Education, Mincer Equation, Gender, Palestine, Turkey
    JEL: J16 J24 J31 J45 O31
    Date: 2011–08
  4. By: Kenji Moriyama
    Abstract: This paper investigates the degree of inflation inertia in Egypt and its determinants using the cross country data consisting of over 100 countries. Medium-unbiased estimator of inflation inertia in Egypt is high compared to other countries, as indicated by its location around the upper quartile among the sample. The cross country analysis indicates that counter-cyclical macroeconomic policy and fiscal consolidation are a key to reduce inflation inertia and the costs of disinflation.
    Keywords: Business cycles , Cross country analysis , Egypt , Fiscal consolidation , Inflation , Monetary policy ,
    Date: 2011–07–11
  5. By: Mohammad Reza Farzin; Dominique M. Guillaume; Roman Zytek
    Abstract: On December 18, 2010, Iran increased domestic energy and agricultural prices by up to 20 times, making it the first major oil-exporting country to reduce substantially implicit energy subsidies. This paper reviews the economic and technical issues involved in the planning and early implementation of the reform, including the transfers to households and the public relations campaign that were critical to the success of the reform. It also looks at the reform from a chronological standpoint, in particular in the final phases of the preparation. The paper concludes by an overview of the main challenges for the second phase of the reform.
    Keywords: Agricultural prices , Banking sector , Corporate sector , Energy prices , Fiscal policy , Fiscal reforms , Legislation , Oil revenues , Price adjustments , Price increases , Subsidy payments ,
    Date: 2011–07–14

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