nep-ara New Economics Papers
on Arab World
Issue of 2013‒08‒31
ten papers chosen by
Paul Makdissi
University of Ottawa

  1. The Role of Extensive Margin in Exports of Turkey : A Comparative Analysis By Altan Aldan; Olcay Yucel Culha
  2. Panel analysis of CO2 emissions, GDP, energy consumption, trade openness and urbanization for MENA countries By Farhani, Sahbi; Shahbaz, Muhammad; AROURI, Mohamed El Hedi
  3. Credit Growth Volatility By Oduncu, Arif; Ermişoğlu, Ergun; Polat, Tandogan
  4. Network Centrality Measures and Systemic Risk: An Application to the Turkish Financial Crisis By Tolga Umut Kuzubas; Inci Omercikoglu; Burak Saltoglu
  5. The MENA Region - an Optimal Currency Area? Evaluating its Stability by Taylor-Rule derived Stress Tests By Mouchera Karara
  6. The Role of Natural Gas Consumption and Trade in Tunisia’s Output By Farhani, Sahbi; Shahbaz, Muhammad; Arouri, Mohammed
  7. National Sentiment and Consumer Choice: The Iraq War and Sales of US Products in Arab Countries By Sofronis Clerides; Peter Davis; Antonis Michis
  8. Task Organization, Human Capital and Wages in Moroccan Exporting Firms By Christophe Muller; Christophe J. Nordman
  9. Israeli corporate tax policy: A pro-growth system at risk By Alex Brill
  10. Turkiye’de Uretici ve Tuketici Fiyatlari Arasindaki Iliski Uzerine Bir Degerlendirme By Oguz Atuk; Fethi Ogunc; M. Utku Ozmen; Cagri Sarikaya

  1. By: Altan Aldan; Olcay Yucel Culha
    Abstract: Turkey successfully increased its share in the world exports in the last decades. We examine the role of extensive margin, in other words, new export products and destinations, on Turkish export performance between 1993 and 2011, in comparison with some other countries. Our results suggest that, Turkey was quite successful in extending its export products and markets compared to other developing countries. The success of Turkey in extensive margin mostly comes from entering new markets. Nevertheless, the share of Turkey’s export basket in world’s exports is still comparatively low as of 2011. Turkey still has important opportunities to increase her exports via extensive margin.
    Keywords: Turkey, Exports, Extensive margin, Comparative studies of countries
    JEL: F10 F14 F19 O57
    Date: 2013
  2. By: Farhani, Sahbi; Shahbaz, Muhammad; AROURI, Mohamed El Hedi
    Abstract: This paper empirically parallels two approaches: The first one follows the studies of Halicioglu (2009), Jalil and Mahmud (2009), and Jayanthakumaran et al. (2012) which attempt to introduce energy consumption and trade into the environmental function (related carbon dioxide ‘CO2’ emissions to Gross Domestic Product ‘GDP’); whereas the second approach extends the single work of Hossain (2011) which attempts to introduce urbanization as a means to circumvent omitted variable bias. For 11 Middle East and North African (MENA) countries over the period 1980-2009, the empirical results appear to be relevant in light of the Environmental Kuznets Curve (EKC) literature based on the cointegrated and causal relationship. Policy implications indicate that: i) more energy use, higher GDP and greater trade openness tend to cause more CO2 emissions; ii) the inclusion of urbanization in the environmental function improves the final results and positively affects the pollution level; and iii) MENA countries should search the best policy which can stabilize the rise of growth GDP and trade openness, and which can also control the continuous increase in the use of energy.
    Keywords: Environmental Kuznets Curve (EKC) literature, Panel data analysis, Middle East and North African (MENA) countries
    JEL: C5
    Date: 2013–08–16
  3. By: Oduncu, Arif; Ermişoğlu, Ergun; Polat, Tandogan
    Abstract: The Central Bank of the Republic of Turkey has started to implement its new policy mix since late 2010. In this new approach expectations, credit growth and reel exchange rate are monitored closely as key indicators for financial stability on top of price stability. The effect of this new monetary policy framework on the volatility of credit growth is the main theme of this note. To the best of our knowledge, we are the first to analyze the impact of new policy mix on the credit growth volatility. It is shown that there is a significant decrease in the volatility of credit growth after the introduction of new policy framework at late 2010. Therefore, it can be said that this new monetary policy framework contributes to financial stability in Turkey by lessening the credit growth volatility.
    Keywords: Volatility, Credit growth, Central banking, CBRT’s new policy mix, Financial Stability
    JEL: C22 E52 E58
    Date: 2013–08
  4. By: Tolga Umut Kuzubas; Inci Omercikoglu; Burak Saltoglu
    Date: 2013–12
  5. By: Mouchera Karara (Faculty of Management Technology, The German University in Cairo)
    Abstract: The introduction of the European currency union and the EURO as common currency was an unprecedented experiment in monetary history. Not surprisingly, it has attracted a lot of attention to the concept of monetary unions, and it has the potential to be a role model for other parts of the world. This paper aims at identifying potential currency unions in the MENA region. To assess their sustainability, the optimal interest rates of the members of each potential union is estimated and used to calculate a stress level index. The sample used in this study consists of eleven countries where Taylor rates were calculated using data from 1998 to 2008. The stress test results provide a clear result: Two monetary sub-unions, namely the Saudi Arabia - Kuwait union and the Mashreq union (Jordan, Lebanon, Syria, and Palestine), are found to have relatively low stress levels and high benefits from a common currency. In contrast, a large MENA union would suffer from very high stress levels and only modest advantages of a common currency.
    Keywords: Monetary union, MENA, Mashreq, GCC, stress analysis, economic integration, potential unions, interest rates
    JEL: F15 E42 O53
    Date: 2013–07
  6. By: Farhani, Sahbi; Shahbaz, Muhammad; Arouri, Mohammed
    Abstract: This paper examines the impact of natural gas consumption, real gross fixed capital formation and trade on the real GDP in case of Tunisia over the period of 1980-2010. We used Auto-Regressive Distributed Lag (ARDL) bounds testing approach to test the existence of long run relationship between the variables. The Vector Error Correction Method (VECM) Granger approach is applied to test the direction of causal relation between the series. Our findings indicate the existence of long-run relationship among the variables. Natural gas consumption, real gross fixed capital formation and trade add in economic growth. Natural gas consumption, real gross fixed capital formation and real trade Granger cause real GDP. These findings open up new insights for policy makers to formulate a comprehensive energy policy to sustain economic growth for long run.
    Keywords: Natural gas consumption, Economic growth, Tunisia, ARDL approach
    JEL: C1
    Date: 2013–08–18
  7. By: Sofronis Clerides (University of Cyprus, Cyprus; CEPR, UK); Peter Davis (Compass Lexecon, UK); Antonis Michis (Central Bank of Cyprus, Cyprus)
    Abstract: Did the rise in anti-American sentiment caused by the Iraq war aect sales of US goods abroad? We address this question using data on soft drink and fabric detergent sales in nine Arab countries. We nd a statistically signicant negative impact of the war on sales of US soft drinks in seven countries. The impact dissipates after a few months in two countries but persists in the other ve. In the case of detergents we only nd a signicant negative impact in one country. We conclude that international politics can sometimes aect consumer behavior and impact market outcomes.
    Keywords: consumer choice, consumer boycotts, Iraq war
    JEL: D12 D01 L66
    Date: 2013–07
  8. By: Christophe Muller (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales [EHESS] - Ecole Centrale Marseille (ECM)); Christophe J. Nordman (DIAL - Développement, institutions et analyses de long terme - Institut de recherche pour le développement [IRD], IZA - Institute for the Study of Labor)
    Abstract: We conduct a case study of the linkages of task organization, human capital accumulation and wages in Morocco, using matched worker-firm data for Electrical-mechanical and Textile-clothing industries. In order to integrate task organization into the interacting processes of workers' training and remunerations, we assume a recursive model, which is not rejected by our estimates: task organization influences on-the-job training that affects wages. Beyond sector and gender determinants, assignment of workers to tasks and on-the-job training is found to depend on former education and work experience in a broad sense. Meanwhile, participation in on-the-job training is stimulated by being assigned to a team, especially of textile sector and for well-educated workers. Finally, task organization and on-the-job training are found to affect wages.
    Keywords: Morocco; wages; on-the-job training; human capital; task organization
    Date: 2013–08
  9. By: Alex Brill (American Enterprise Institute)
    Abstract: A troubling tax policy trend is emerging in Israel, where once-aggressive efforts toward a competitive corporate tax rate are being reversed. The consequences in a small and open economy like Israel's are potentially dire and could extend to investors in the Israeli economy from the United States and other foreign countries.
    Keywords: israel,foreign direct investment,Corporate tax rates
    JEL: A H
    Date: 2013–06
  10. By: Oguz Atuk; Fethi Ogunc; M. Utku Ozmen; Cagri Sarikaya
    Abstract: [TR] Bu notta, TUFE ve UFE enflasyon oranlari arasindaki farklilasmanin nedenleri ozetlendikten sonra iki endeks arasindaki geciskenlik iliskisi incelenmektedir. Uretici fiyatlarinin vergi haric derleniyor olmasi ve hizmet fiyatlarini icermemesi, islenmemis gida urunleri ile tarim urunlerinin her iki endekste esanli kapsamlarinin ortusmemesi, tuketici fiyatlarinda goreli payi yuksek belirli urunlerde dolayli vergi artislarinin gozlenmesi, uretici fiyatlarinin kur ve ithalat fiyat geciskenliginin tuketici fiyatlarina kiyasla yuksek olmasi aradaki donemsel farkin temel belirleyicileridir. Ancak, TUFE ve UFE enflasyonlarinin uzun donemli ortalamalarinin birbirine paralel olmasi ve uretici ve tuketici fiyatlarinin uzun donemde birbirine yakinsiyor olmasi sebebiyle donemsel farklarin sistematik bir ayrismaya isaret etmedigi degerlendirilmektedir. Etki-tepki analizlerine dayanan ampirik bulgular, en yakindan iliskili olmasi beklenen cekirdek fiyat tanimlarinda dahi uretici fiyatlarindan tuketici fiyatlarina geciskenligin tam (bire-bir) olmadigi yonundeki gorsel analizleri desteklemektedir. [EN] In this note, the reasons for the difference between CPI and PPI inflation rates are discussed and the pass-through from producer to consumer prices is analyzed. The major determinants of this temporary difference are as follows : Compilation of PPI with tax free prices and the exclusion of prices of services; the mismatch between the contemporary baskets of unprocessed food and agriculture products; indirect tax adjustments for the selected products with a relatively high share in the CPI; the relatively faster and higher pass-through of exchange rate and foreign prices on PPI. Nonetheless, given that the average annual CPI and PPI inflations are similar and that consumer and producer prices converge in the long term, the temporary difference between the two indices does not point to a systematic divergence. Empirical results support visual inspections that imply partial pass-through from producer to consumer prices even when core measures are taken into account.
    Date: 2013

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