nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2014‒03‒08
six papers chosen by
Paul Makdissi
University of Ottawa

  1. The Real Exchange Rate and External Competitiveness in Egypt, Morocco and Tunisia By Zuzana Brixiova; Balázs Égert; Thouraya Hadj Amor Essid
  2. Determinants of Educational Attainment in Mena By Menshawy Badr; Oliver Morrissey; Simon Appleton
  3. Performance Persistence of Islamic Equity Mutual Funds By Abdelbari El Khamlichi; Kamel Laaradh; Mohamed Arouri; Frédéric Teulon
  4. The impact of Migrant Workers' Remittances on the Living Standards of families in Morocco: a Propensity Score Matching Approach By Jamal BOUOIYOUR; Amal MIFTAH
  5. Modelling Inflation Shifts and Persistence in Tunisia: Perspective from an Evolutionary spectral approach By Zied Ftiti; Duc Khuong Nguyen; Khaled Guesmi; Frédéric Teulon
  6. Business Cycles in Oil Exporting Countries: A Declining Role for Oil? By Salman Huseynov, Vugar Ahmadov

  1. By: Zuzana Brixiova; Balázs Égert; Thouraya Hadj Amor Essid
    Abstract: Egypt, Morocco and Tunisia face challenges competing on the global markets, as shown by their relatively low and stagnant export shares. The limited export competitiveness has hampered external demand, growth and employment. Applying, for the first time to North Africa, the stock-flow approach to the real equilibrium exchange rate, this paper evaluates the countries’ real exchange rate misalignments during the past three decades. While Egypt experienced periods of substantial misalignment, including in recent years, the exchange rates in Morocco and Tunisia have broadly reflected the underlying fundamentals. In all three countries structural factors are key to boosting exports, alongside of avoiding sizeable future misalignments. Intra-regional trade – both with North Africa and the rest of the continent – together with greater orientation to fast growing emerging markets could also raise countries’ external competitiveness.
    Keywords: real exchange rate misalignment, stock-flow model, competitiveness, trade, Africa
    JEL: F3 F41 C5 O1
    Date: 2014–01–01
  2. By: Menshawy Badr; Oliver Morrissey; Simon Appleton
    Abstract: This study examines the determinants of educational outcome in eight selected MENA countries. The complicated structure of the TIMSS data has been considered carefully during all the stages of the analysis employing plausible values and jackknife standard error technique to accommodate the measurement error of the dependant variable and the clustering of students in classes and schools. The education production functions provide broad evidence from mean and quantile analysis of very low returns to schooling; few school variables are significant and none have effects across countries and quantiles. In general, student characteristics were far more important than school factors in explaining test scores, but there was considerable variability across countries in which specific factors were significant. Strikingly, computer usage was found to influence students’ performance negatively in six MENA countries. Only Turkey and Iran had a significant positive effect of computer usage on maths achievements.
  3. By: Abdelbari El Khamlichi; Kamel Laaradh; Mohamed Arouri; Frédéric Teulon
    Abstract: The debate over the under-performance or the over-performance of Islamic funds is not over yet. Hence, our literature review exhibits that all the previous works studied the Islamic equity funds without exploring the persistence of their performance, even if this issue is very important to address several questions in financial management. Our article contributes to the current literature by addressing this shortage; we proceed further with the aim of finding any consistency in funds’ performance. Using a sample of 111 Islamic equity funds over the period 2005 to 2011, the study is carried out through applying different performance measures and non-parametric tests of performance persistence over three equal sub-periods. Our measures of performance show that Islamic funds do not constitute a homogenous group, but over the whole period, Malaysian and Saudi Arabian funds perform better. We find evidence that supports non-persistence in performance or rather the persistence of non-performance of Islamic mutual funds during and after the last financial crisis. This raises the question of the management strategies implemented by the banks managing Islamic funds.
    Date: 2014–02–25
  4. By: Jamal BOUOIYOUR; Amal MIFTAH
    Abstract: The impact of Migrant Workers' Remittances on the Living Standards of families in Morocco: a Propensity Score Matching Approach
    Date: 2014–02
  5. By: Zied Ftiti; Duc Khuong Nguyen; Khaled Guesmi; Frédéric Teulon
    Abstract: The main objective of this paper consists to study what we learned about the dynamic of Tunisian inflation rate in the last two decades. This question is overriding concern to monetary policy analysis because it gives us information’s on inflation forecasting. In other words, before given monetary policy recommendations to Tunisian policy makers, after the actual downward of economic indicators and the disarmed of monetary policy consequently of Arabic spring, it is consistent to learn and to know the main characteristics of inflation history in this country. In this work, we suggest studying the specifics of Tunisian inflation dynamic’s on two dimensions. Firstly, we think that is useful to learn the different Tunisian inflation experiences regimes. Then, we try to analysis the nature of Tunisian inflation rate response to shocks; we try to analysis the inflation persistence in order to determine the nature of economy response’s to different chocks. This is the first paper proposing this methodology to analyse monetary policy and there is the first one proposing a measure of inflation persistence. In this work, we contribute to empirical literature of inflation persistence by it proposing a new measure based on the theory of evolutionary co-spectral analysis proposed by Priestley and Tong (1973). The mains findings of this paper show a stable inflation regime around 5.5% in the last ten years. We prove that the Tunisia inflation had a higher degree of inertia which traduce it’s gradually response on shocks. Consequently, we suggest to policy makers to make institutional reforms to reduce inflation.
    Keywords: Inflation, Strcutural Break, Spectral Analysis, auto-spectral analysis, Bai Berron test, inflation persistence.
    JEL: C16 E52 E63
    Date: 2014–02–25
  6. By: Salman Huseynov, Vugar Ahmadov (Central Bank of the Republic of Azerbaijan)
    Abstract: In this study, we investigate the nature and possible sources of economic fluctuations in oil exporting countries using principle component and impulse-response analysis. The principal component analysis shows that the first two components can be statistically significantly explained by world GDP, but not by oil prices. We further develop our study using impulse-response analysis and find that a global demand shock is as important as oil supply and oil demand shocks in determining the dynamics of macroeconomic variables of interest. Though previous studies in this field underline the importance of institutional factors, we find that rising global political and economic integration can play a critical role in explaining business cycles of these economies. With increasing integration into the world economic system, oil exporting countries have become more susceptible to world business cycles, the sources of economic fluctuations have become more diversified, and consequently, the role of oil has declined over time. These results have crucial policy implications for the role of the fiscal and monetary policy in managing economic fluctuations in these economies.
    Keywords: Business Cycles; Oil Exporting Countries; Oil price; Bayesian methods
    JEL: C11 C32 E30 E32
    Date: 2014–02–18

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