nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2016‒07‒02
six papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Fast profits in a fasting month? A markov regime switching approach in search of ramadan effect on stock markets By Hasbullah, Faruq; Masih, Mansur
  2. Trajectories in Knowledge Economy: Empirics from SSA and MENA countries By Asongu, Simplice; Andrés, Antonio R.
  3. Essays on banking sector’s dynamics, expectations, preferences and impact By Polat, Tandogan
  4. Les dépenses publiques et la croissance économique au Maroc By Tahtah, Hind
  5. Die relative Autonomie der Zentralbank: Eine politökonomische Analyse der türkischen Geldpolitik nach 2001 By Ulas Sener
  6. Parasal Aktarım Mekanizması: Firma Bilanço Kanalı ve Türkiye By KOC, Umit; SAHIN, Hasan

  1. By: Hasbullah, Faruq; Masih, Mansur
    Abstract: Ramadan is deemed to be the holiest month which is observed by 1.6 billion Muslims across the world. We investigate the stock returns during Ramadan for 5 biggest stock markets in Muslim majority countries (Saudi Arabia, Malaysia, Turkey, Indonesia and Kuwait) by taking weekly data over the period of 5 years. By applying the Markov Regime Switching technique we found out that there is not enough evidence to conclude that Ramadan effect plays a significant part in providing investors with higher return during the one-month period. However, we found out that all the stock exchanges move in the same direction during the Ramadan 2012 and Ramadan 2015 which perhaps may be attributed to the Eurozone Crisis and oil price drops. These show that external factors may play a far bigger role in determining the returns from the stock market than a seasonality effect.
    Keywords: Ramadan effect, stock markets, markov regime switching
    JEL: C22 C58 G12
    Date: 2016–06–20
  2. By: Asongu, Simplice; Andrés, Antonio R.
    Abstract: In the first critical assessment of knowledge economy dynamic paths in Africa and the Middle East, but for a few exceptions, we find overwhelming support for diminishing cross-country disparities in knowledge-base-economy dimensions. The paper employs all the four components of the World Bank’s Knowledge Economy Index (KEI): economic incentives, innovation, education, and information infrastructure. The main finding suggests that sub-Saharan African (SSA) and the Middle East and North African (MENA) countries with low levels in KE dynamics and catching-up their counterparts of higher KE levels. We provide the speeds of integration and time necessary to achieve full (100%) integration. Policy implications are discussed.
    Keywords: Knowledge economy; Principal component analysis; Panel data; Convergence
    JEL: F42 O10 O38 O57 P00
    Date: 2015–12
  3. By: Polat, Tandogan (Tilburg University, School of Economics and Management)
    Abstract: The dissertation consists of four chapters that represent separate papers in the area of banking sector. The first chapter explores the impact of the new policy mix adopted by the CBRT after the global financial crisis on credit growth volatility, which is closely monitored as one of the key indicators for financial stability in Turkey. The second chapter employs a new unique database and introduces new uncertainty and disagreement measures for the long-term inflation and real rate expectations. The third chapter investigates the factors that affect the banking sector’s reserve maintenance pattern within the reserve requirement maintenance period with the use of bank level data. The final chapter focuses on the impact of banking sector indicators on the sovereign risk premium of countries with different levels of development and current account balance structure, and during periods with different global risk perceptions.
    Date: 2016
  4. By: Tahtah, Hind
    Abstract: The relationship between public expenditures and the economic growth attracts more and more the interests of most economists, especially after the financial crisis of 2008. A return to Keynesianism has been the subject of contemporary debates and still one of the most proposed solutions to this financial crisis. This paper explores the causal links between budget spending and economic growth, considering the externality effects exerted by the budgetary expenditure on private investment, which cannot be neglected in explaining economic growth. The results of the estimation of two error correction models conclude that the budgetary expenditures in investment and human capital formation (especially in education and transport and communication) promote growth and encourage private investment. Also, public authorities should reduce final consumption expenditure of government, since these have a negative impact on economic growth in the short term.
    Keywords: Dépenses publiques; croissance économique; modèle à correction d’erreurs; causalité au sens de Granger
    JEL: C3 H51 H52 H54 O47
    Date: 2013
  5. By: Ulas Sener
    Abstract: This book examines the relationship between central bank independence and monetary policy in Turkey with a political economic approach. Focusing on the Turkish example, it addresses the theoretical and empirical questions that arise in connection with central bank independence. It analyses the Turkish central bank's institutional statue and its implications for monetary policy since its formal independence in 2001. The main outcome is that Turkey's central bank cannot be regarded as an independent and depoliticized monetary institution, not least due to the high political pressure the ruling Justice and Development Party was able to put on monetary policy decision, especially after the global financial crises 2007-08. The book investigates further domestic and international political economic conditions and developments in regards to the exertion of influence on the Turkish monetary policy. The case of Turkey shows that even a formally independent central bank is unable to detach itself from political interference, in spite of a strong ideology of de-politicized monetary policy. To conceptually grasp this outcome the present title proposes an understanding of the CBRT’s institutional status as one of ‘relative autonomy’.
    Keywords: Turkey, central bank independence, monetary policy, political economy, relative autonomy
    JEL: E52 E58 P16
    Date: 2016–06
  6. By: KOC, Umit; SAHIN, Hasan
    Abstract: According to the firm balance-sheet channel of monetary transmission mechanism, since external finance is costly than internal finance, financially constrained firms chose internal finance. Monetary and fiscal authorities should consider the existence of the firm balance-sheet channel, when they design policies if it operates. A rise in real interest rates causes a rise in firm’s debt, fall in net worth and as a result of these changes, a rise in the marginal cost of external financing occurs. Consequently firms’ ability for investing and job creation decreases. In an economy in which investment is positively related with cash flow, an increase in firm’s cash flow results with an inrease in firm’s investment. In this paper we examined the effect of real interest rate, real exchange rate, cash flow and sales on the investment behaviour of the firm. The panel data analysis, performed by using Central Bank of Turkey’s firm balance sheet database, shows that the firm balance-sheet channel operates in Turkey.
    Keywords: Monetary transmission mechanism, firm balance-sheet channel, panel data
    JEL: E22 E52
    Date: 2014–12

This nep-ara issue is ©2016 by Paul Makdissi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.