nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2015‒01‒31
fourteen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. The Impacts of the Global Crisis on the Turkish Economy and Policy Responses By Hasan Comert ; Selman Colak
  2. Inflation and Inflation Uncertainty in Turkey By dogru, bulent
  3. A Perceptual Measure of Innovation Performance: Micro Level Evidence from Turkey By Fındık, Derya ; Beyhan, Berna
  4. Determinants of Transitions across Formal/Informal Sectors in Egypt By Aysit Tansel ; Zeynel Abidin Ozdemir
  5. Tunisia: Fifth Review Under the Stand-By Arrangement, Request for Modification of Performance Criteria, and Rephasing of Access-Staff Report; Press Release; and Statement by the Executive Director for Tunisia By International Monetary Fund. Middle East and Central Asia Dept.
  6. The inflation targeting policy in Tunisia? Between perception and reality By Kadria, Mohamed ; Ben Aissa, Mohamed Safouane
  7. Using Ordinal Variables to Measure Multidimensional Poverty in Two South Mediterranean Countries By Valérie Bérenger
  8. A gravity assessment of Moroccan F&V monthly exports to EU countries: The effect of trade preferences revisited By Márquez-Ramos, Laura ; Martinez-Gomez, Victor
  9. International Sanctions against Iran under President Ahmadinejad: Explaining Regime Persistence By Oliver Borszik
  10. Specula􀆟ve Ra􀆟onal Bubbles: Asset Prices in GCC Equity Markets By Abdul Manap, Turkhan Ali ; Omar, Mohd Azmi
  11. An Islamic Vision Development Based Indicators in Analysing the Islamic Banks Performance: Evidence from Malaysia, Indonesia and selected GCC Countries By Ngalim, Siti Manisah ; Ismail, Abdul Ghafar
  12. Price Transmission Analysis in the Fresh Vegetable Supply Chain of Saudi Arabia By Alhashim, Jawad ; Saghaian, Sayed
  13. Political Institutions and Government Spending Behavior: Theory and Evidence from Iran By S. F. Dizaji ; M. R. Farzanegan ; A. Naghavi
  14. Büyüme Üzerine Düşünceler By Tuncer Bulutay

  1. By: Hasan Comert (Department of Economics, METU ); Selman Colak
    Abstract: This paper focuses on the impacts of the recent global crisis on the Turkish economy and the policy measures taken in response to the crisis. Turkish economy was adversely affected by the crisis through mainly three channels, namely expectations channel, trade channel and financial channel. The distinctive characteristic of the crisis was a severe export shock which can account for an important part of the decline in production in Turkey. Beside this, a significant sudden stop in financial flows worsened the credit conditions in the economy. As a result, the Turkish economy witnessed one of its worst economic down-turns after the Second World War. In fact, the Turkish growth performance was one of the worsts among developing countries. However, as opposed to previous crises, the financial markets in Turkey and many other developing countries did not experience a collapse. We argue that this is mainly related to the small magnitude and short duration of the financial shocks hitting Turkey and other developing countries relative to the ones in the previous decades. In this sense, the Turkish economy might not have been fully tested during the last global crisis. How the economy will behave in case of a larger financial shock is still unknown.
    Keywords: Turkish Economy, Developing Countries, Recent Global Crises, Financial Flows, Monetary and Fiscal Policies.
    JEL: F32 E63 E66 G01
    Date: 2014–12
  2. By: dogru, bulent
    Abstract: Abstract: In this study, the relationship between inflation and inflation uncertainty is analyzed using Granger causality tests with annual inflation series covering the time period 1923 to 2012 for Turkish Economy. Inflation uncertainty is measured by Exponential Generalized Autoregressive Conditional Heteroskedastic model. Econometric findings suggest that although in long run the Friedman's hypothesis that high inflation increases inflation uncertainty is strongly supported, in short run the Holland hypothesis proposing that the increase in the inflation uncertainty decreases inflation is also supported for Turkish Economy. We also make analyses for subsample periods selected due to the major policy changes in Turkish economic history. The causality between inflation and inflation uncertainty in these subsample periods is mixed and depends on time period analyzed.
    Keywords: Inflation Uncertainty, Conditional Variance, Granger Causality, Exponential Generalized Autoregressive Conditional Heteroskedastic Model
    JEL: C4 C40 E40
    Date: 2014
  3. By: Fındık, Derya ; Beyhan, Berna
    Abstract: This paper aims to introduce a qualitative indicator to measure innovation performance of Turkish firms by using firm level data collected by Turkish Statistical Institute (TURKSTAT) in 2008 and 2009. We propose a new indicator to measure the innovation performance which is simply based on the perception of firms regarding to the impacts of innovation. In order to create performance indicators we conduct a factor analysis to group the firms’ perceptions on the impacts of innovation. Factor analysis gives us product and process oriented impacts of innovation. There are significant differences among product innovators, process innovators and firms engaged in both product and process innovations with respect to their perceptions on product and process oriented impacts of innovation. Among these three groups, product and process oriented impacts provide a highest value for the firms that perform both product and process innovations. As far as the link between firm characteristics and the impact of innovation is considered, there is a significant difference between small and large firms with respect to their perceptions on product oriented impact of innovation.While product oriented impact are larger for small firms, large firms focus more on process oriented impact. Anova results also indicate that perceptions on process oriented impact significantly differ among exporter firms, domestic market oriented firms and firms being active in internal and external markets. Process oriented impact generate results in favor of exporting firms.
    Keywords: innovation impact, product oriented impact, process oriented impact
    JEL: L2 M1 M2 O3
    Date: 2014–12
  4. By: Aysit Tansel (Department of Economics, Middle East Technical University; Institute for the Study of Labor (IZA) Bonn; and Economic Research Forum (ERF) Cairo ); Zeynel Abidin Ozdemir (Department of Economics, Gazi University )
    Abstract: Informality is a salient feature of labor market in Egypt as it is the case with many developing countries. This is the first study of the determinants of worker transitions between various labor market states using panel data from Egypt. We first provide a diagnosis of dynamic worker flows across different labor market states. We develop transition probabilities by gender across different labor market states utilizing Markov transition processes. Next we identify the effects of individual, household, job characteristics and location on different mobility patterns by estimating a multinomial logit regression. The results point to the highly static nature of the Egyptian labor market. Government employment and the out of labor force are the most persistent labor market states. Further, only a few of the explanatory variables except high levels of education are found to have predictive power in explaining the transitions from formal wage, informal wage, self-employment, unemployment government employment and out of labor market states.
    Keywords: Labor market dynamics, informality, Markov processes, multinomial logit, Egypt
    JEL: J21 J24 J40 J63 O17
    Date: 2015–01
  5. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: EXECUTIVE SUMMARY Context. On June 7, 2013, the Executive Board approved a 24-month Stand-By Arrangement in an amount equivalent to 400 percent of quota (SDR 1.146 billion or about $1.75 billion). To date, SDR 716.25 million, equivalent to $1.1 billion, has been disbursed. Background. Tunisia is completing a successful political transition to democracy while navigating a challenging environment marked by high social and security tensions, slow growth in trading partners, and spillovers from regional conflicts. At the same time, large external and fiscal imbalances, high unemployment, and increased banking fragilities remain the main challenges. Program implementation has been mixed. All quantitative performance criteria have been met. However, progress on the structural reform agenda has been slow, with considerable delays in the recapitalization of public banks and the legislative agenda on the tax, investment and bank asset recovery fronts. Program strategy. The focus should continue to be on short-term macroeconomic stabilization and laying foundations for higher and more inclusive growth, including by moving forcefully on banking reforms. Prudent fiscal and monetary policy, along with improved budget composition and greater exchange rate flexibility, need to be directed to containing high imbalances and anchoring inflationary expectations. Recapitalizing public banks in line with good international practices is urgent in view of mounting risks to financial stability, and is also important in light of its impact on financial intermediation and growth. Progress on structural reforms is necessary to generate the conditions conducive to private sector–led and inclusive growth and protect the most vulnerable. Risks to program implementation are important. The main risks relate to regional and domestic security tensions, delays in forming a new government, shortfalls in official and market financing, or a further deterioration of the international economic environment. The implementation of program policies will continue to be tested by opposition from vested interests; however, support for the reform agenda among the authorities and a broad spectrum of political parties represents a key risk-mitigating measure. The completion of the fifth review will make SDR 71.625 million (about $110 million) available.
    Date: 2014–12–29
  6. By: Kadria, Mohamed ; Ben Aissa, Mohamed Safouane
    Abstract: In this paper, we tried to examine and provide a clear answer on the possibility of the Central Bank of Tunisia to adopt the inflation targeting (IT) monetary policy. But the transition to the new optimum monetary framework remains a challenge in itself and requires the filling of certain pre-conditions. To do this, we first started by clarifying the conduct of monetary policy in Tunisia and the institutional and structural pre-requisites progress to make in adoption view of this new strategy, which allows more inflation mastering in a context of crisis and post-revolution. Regarding the transmission mechanisms, we conducted an empirical study of dynamic structural VAR models to conclude whether there is a stable and predictable relationship between monetary policy instruments and inflation, which is considered as a strong technical condition in favor of IT.
    Keywords: Inflation targeting, transmission mechanisms, structural VAR, Tunisia.
    JEL: C3 E5
    Date: 2014
  7. By: Valérie Bérenger (University of Nice Sophia Antipolis, France ; GREDEG CNRS )
    Abstract: The main goal of this paper is to highlight the empirical contribution of methodological refinements to "counting approach" poverty measures, and to use ordinal variables as a means of understanding multidimensional poverty in two South Mediterranean countries, namely Egypt and Jordan. The paper relies on the general framework proposed by Silber and Yalonetsky (2013) to compare multidimensional poverty measures, such as the measure based on the Alkire and Foster approach (2011) and applied by UNDP in the construction of the MPI, and others that are sensitive to the distribution of deprivation counts for individuals, such as the family of poverty measures introduced by Chakravarty and D’Ambrosio (2006) and Rippin (2010), and those based on the extension of the Aaberge and Peluso approach as suggested by Silber and Yalonetzky (2013). The findings we obtained make it possible to highlight the complementarities between the various poverty measures. These complementarities prove to be particularly useful for analyzing poverty trends per country and also per area of residence.
    Keywords: counting approach, multidimensional poverty measurement, Egypt, Jordan, Mena
    JEL: I32 D63
    Date: 2014–12
  8. By: Márquez-Ramos, Laura ; Martinez-Gomez, Victor
    Abstract: We analyze the effect of different trade preferences granted to Southern and Eastern Mediterranean Countries (SEMCs). Specifically, we focus on monthly exports of four fruits and vegetables from Morocco to EU countries. We construct three indicators that consider different types of preferences and trade policies, and we include them in a gravity model. Furthermore, quantitative limits for these preferences are modelled. Our main results are that trade preferences are significant in positively determining exports from Morocco to the EU. Therefore, the Moroccan policy option that consists on negotiating trade preferences in key competitive sectors is translated into export increases.
    Keywords: Gravity, fruits and vegetables, trade preferences, EU countries, Southern and Eastern Mediterranean Countries, International Relations/Trade,
    Date: 2014–08
  9. By: Oliver Borszik (GIGA German Institute of Global and Area Studies )
    Abstract: This paper seeks to explain how Iran’s regime persisted in the face of international sanc-tions during Mahmud Ahmadinejad’s presidency, from 2005 to 2013. It reconstructs the interplay between the intensifying UNSC, US and EU sanctions and the targeted regime’s strategies to advance the nuclear program and maintain intra-elite cohesion. Initially, the nuclear program was expanded due to high oil income in combination with explicit resistance to the presumed regime-change ambitions of the Western sanction senders. At the end of Ahmadinejad’s presidency, the decline of foreign exchange earnings from oil exports and the continued regime-change scenario contributed to the neglect of this regime-legitimizing strategy in favor of the maintenance of intra-elite cohesion. My main argument is that once the US and EU oil and financial sanctions curtailed the cost-intensive further development of the nuclear program, Supreme Leader Ali Khamenei used these sanctions as an external stimulus to contain burgeoning factional disputes.
    Keywords: Iran, international sanctions, authoritarian regimes, nuclear strategy, factional disputes
    Date: 2014–11
  10. By: Abdul Manap, Turkhan Ali (The Islamic Research and Teaching Institute (IRTI) ); Omar, Mohd Azmi (The Islamic Research and Teaching Institute (IRTI) )
    Abstract: .
    Date: 2015–01–19
  11. By: Ngalim, Siti Manisah ; Ismail, Abdul Ghafar (The Islamic Research and Teaching Institute (IRTI) )
    Abstract: The current evaluation of Islamic Banks performance uses the conventional measurs, which is not unacceptable as the current Islamic Banks’ structure is mainly equal of its conventional counterparts in the sense that they are developed in the frame of business entity, thus businessbased performance such as profitability becomes the main concern. However, the fact that an Islamic Bank is governed and guided by Islamic Law, necessitates a deeper and more careful understanding of the purpose of the law itself. This subject should never be neglected, as the Sharia, itself exists for a bigger purpose than merely guidelines or a statement of what is allowed and what is prohibited. The theory of the purpose of law or maqasid al-Shari’ah as first proposed and structured by al-Juwaini, has patched the path towards understanding thus better implementation of Islam as it should to capture and achieve its higher intent, the real well-being of human in this world (al-falah fid-dunya) and the hereafter (al-falah fil-aakhirah). This study learns from Schumpeterian Finance-Growth Theory vis-à-vis the Development in the light of Maqasid al-Shari’ah by Chapra (2008) to: first, highlight the Islamic-based Finance-Development Theory that focuses on development in the light of Maqasid al-Shari’ah. It then analyses its Islamicvision- development-based (IVDB) performance of Islamic banks in achieving al-falah as a complement to its business-based measurement. The analysis will be based on annual reports of 20 Islamic banks in major continent of players in Islamic Finance namely Malaysia, Indonesia and selected GCC countries. The result is anticipated to give a new breath in measuring performance of Islamic financial institution, in this case Islamic banks and highlight the Islamic vision of its function and how far it has fulfilled the vision.
    Keywords: Islamic banks; financial performance; maqasid al sharia; economic development
    Date: 2015–01–19
  12. By: Alhashim, Jawad ; Saghaian, Sayed
    Abstract: Price transmission studies focus on how price variation at one marketing level affects the prices at other levels, either vertically or horizontally. Price movement among farms, wholesale, and retail levels is indicative of vertical price transmission. Any change in the farmer’s price is reflected in the final consumer’s price. Asymmetric price transmission (APT) can occur anywhere along the supply chain. The objective of this study is to explore the existence of APT for selected fresh vegetable products in Saudi Arabia. This study focused on six perishable products: tomatoes, potatoes, cucumbers, squash, onions, and garlic. The Wolffram-Houck and an error-correction model were used to analyze monthly average wholesale and retail price data from January 1999 to December 2012. Granger causality tests provided the causality relationship between market levels of cucumbers and squash, which were independent. The results indicate price transmission is symmetric for tomatoes, potatoes, and garlic, while onion prices are transmitted asymmetrically.
    Keywords: Market and Prices, Agribusiness, Marketing, Q130 Agricultural Markets and Marketing, Cooperatives, Agribusiness,
    Date: 2015
  13. By: S. F. Dizaji ; M. R. Farzanegan ; A. Naghavi
    Abstract: This study examines how quality of political institutions affects the distribution of government budget in Iran. We first introduce a mechanism through which this can shift government expenditure from patronage to more constructive public spending. Using impulse response functions (IRF) and variance decomposition analysis (VDC) on the basis of Vector Autoregressive (VAR) model, our results imply that a positive shock towards more democratic institutions leads to negative and statistically significant response of military spending and positive and statistically significant response of education expenditures. Our results are robust to different political institutional quality indicators, ordering of variables in the VAR and different specifications of government spending categories.
    JEL: H11 H41 P16 O53 O43
    Date: 2015–01
  14. By: Tuncer Bulutay (Turkish Economic Association, Ankara, Turkey )
    Abstract: Bu yazıda, Türkiye Ekonomi Kurumu ve Atatürk Üniversitesi İktisadi ve İdari İlimler Fakültesi’nin 24, 25 ekim 2013 tarihinde ortaklaşa düzenledikleri 17. Ulusal İktisat Sempozyumu’na sunduğum büyüme konusundaki görüşlerimi genişleterek açıklıyorum. Sempozyum’da gerçekleşen güzel ve kaliteli toplantılar için sözkonusu Kuruma ve Fakülteye teşekkür ediyorum. Yazıda, belirtilen konuları önceki yazılarımda da incelemiş olduğum ve tekrarlardan kaçınmak istediğim için açıklamalarımı, bazı konuları inceleme dışı bırakarak ve 2002, 2003 yılları sonrası üzerinde yoğunlaşarak sunacağım. Konuyu iki temel başlık altında inceleyeceğim. Açıklamalarımda toplantılarda sunulan değerli görüşlerden de yararlanacağım.
    Date: 2015

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