nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2019‒07‒08
eight papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Rethinking the Lebanese economic miracle: The extreme concentration of income and wealth in Lebanon By Lydia Assouad
  2. The Impact of Domestic and Foreign Direct Investment on Economic Growth: Fresh Evidence from Tunisia By Bouchoucha, Najeh; Bakari, Sayef
  3. The Relationship between Economic Growth, Exports and Imports in Morocco: An Empirical Validation Based on VAR Modeling Techniques and Causality in the Meaning of Granger By Bakari, Sayef; Mabrouki, Mohamed
  4. Day-ahead electricity price forecasting with emphasis on its volatility in Iran (GARCH combined with ARIMA models) By Pourghorban, Mojtaba; Mamipour, Siab
  5. Le développement de la finance islamique entre la tendance et la durabilité dans la région MENA : Application sur les données de panel By Mtiraoui, Abderraouf; Lassoued, Mongi; Hassen Khémiri, Hend
  6. Efforts of Oil Exporters in the Middle East and North Africa to Diversify Away from Oil Have Fallen Short By Adnan Mazarei
  7. On Target? The Incidence of Sanctions Across Listed Firms in Iran By Mirko Draca; Jason Garred; Leanne Stickland; Nele Warrinnier
  8. Iran Has a Slow Motion Banking Crisis By Adnan Mazarei

  1. By: Lydia Assouad (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: I combine household surveys, national accounts and personal income tax records for the 2005-2014 period to produce the first estimates of the national income distribution in Lebanon. I find that income is extremely concentrated, with the top 1 and 10% of the adult population receiving 25 and 55% of national income on average, placing Lebanon among the countries with the highest level of income inequality in the world. These figures, which are the first recent statistics on income inequality in an Arab country, question the view of Lebanon as a paragon of economic success in the Middle East. The dynamism of the tourism, banking and real-estate sectors has benefited only a minority of the population, while a large part still lives in extreme poverty.
    Keywords: Lebanon,Inequality
    Date: 2019–06
  2. By: Bouchoucha, Najeh; Bakari, Sayef
    Abstract: This paper aims to analyze the impact of domestic investment and Foreign Direct Investment on economic growth in Tunisia during the period 1976–2017. This study is based on the Auto-Regressive Distributive Lags (ARDL) approach that is proposed by Pesaran et al (2001). Bound testing approaches to the analysis of level relationships. According to the results of the analysis, domestic investment and foreign direct investment have a negative effect on economic growth in the long run. However, in the short run, only domestic investment causes economic growth. The findings are important for Tunisian economic policy makers to undertake the effective policies that can promote and lead domestic and foreign investments to boost economic growth.
    Keywords: Domestic investment; Foreign Direct Investment; Economic Growth; Tunisia; ARDL.
    JEL: F11 F13 F14 F43 O47 O55
    Date: 2019–06
  3. By: Bakari, Sayef; Mabrouki, Mohamed
    Abstract: This paper analyzes the relationship between economic growth, export and import in Morocco. VAR modeling techniques and Granger causality are used in empirical work. The study showed a causal effect ranging from economic growth in exports. Evidence shows that economic growth favors exports. However, there is no effect that goes for export to growth. In addition, there is no relationship between imports and economic growth.
    Keywords: Economic growth, Exports, Imports, VAR, Causality, Morocco
    JEL: F10 F11 F13 F14 O47 O55
    Date: 2019–01
  4. By: Pourghorban, Mojtaba; Mamipour, Siab
    Abstract: This paper provides a method to forecast day-ahead electricity prices based on autoregressive integrated moving average (ARIMA) and generalized autoregressive conditional heteroskedastic (GARCH) models. In the competitive power market environment, electricity price forecasting is an essential task for market participants. However, time series of electricity price has complex behavior such as nonlinearity, nonstationarity, and high volatility. ARIMA is suitable in forecasting, but it is not able to handle nonlinearity and volatility are existent in time series. Therefore, GARCH models are used to handle volatility in the in time series forecasting. The proposed method is computed using the daily electricity price data of Iran market for a five-year period from March 2013 to February 2018. The results reported in this paper illustrate the potential of the proposed ARMA-GARCH model and this combined model has been successfully applied to real prices in the Iranian power market.
    Keywords: Electricity price forecasting, ARIMA model, GARCH model
    JEL: C3 C32 C5 C53 Q4 Q47
    Date: 2019–02–14
  5. By: Mtiraoui, Abderraouf; Lassoued, Mongi; Hassen Khémiri, Hend
    Abstract: Drawing on a review of the innovative literature, we first examine theoretically the nature of the relationship between financial development and economic growth, while taking into account the role played by Islamic finance in steering investment and public spending. which takes into account the effective human (education) in the presence of conventional finance. Finally, we try empirically to discover the influences of Islamic finance as a trend towards economic growth describing the stability and sustainability of any financial system used and hence the relationship between Islamic financial development and economic growth. Our empirical validation is based on a panel data application for our MENA region over a long period of 20 years (1990-2009).
    Keywords: Islamic Finance, Economic Growth and Panel Data
    JEL: G32
    Date: 2019–07–02
  6. By: Adnan Mazarei (Peterson Institute for International Economics)
    Abstract: Faced with fluctuating oil prices and other uncertainties, the oil-rich countries of the Middle East and North Africa have made efforts—some for decades—to diversify their exports, in order to reduce their dependence on oil revenue and generate much-needed jobs. The results of these diversification efforts have been disappointing overall, raising concerns about the region's stability and potential risk to the global economy. Transparent public debates and dialogue are needed, especially with the private sector, about policies that have worked and those that have not, the costs and benefits of various diversification strategies, and improving governance of public resources being used for diversification.
    Date: 2019–04
  7. By: Mirko Draca (Department of Economics, University of Warwick, Coventry, United Kingdom); Jason Garred (Department of Economics, University of Ottawa, Ottawa, ON); Leanne Stickland (Department of Economics, University of Warwick, Coventry, United Kingdom); Nele Warrinnier (Faculty of Economics and Business, KU Leuven, Leuven, Belgium)
    Abstract: How successful are sanctions at targeting the economic interests of political elites in affected countries? We study the efficacy of targeting in the case of Iran, using information on the stock exchange-listed assets of two specific political entities with substantial influence over the direction of Iran's nuclear program. Our identification strategy focuses on the process of negotiations for sanctions removal, examining which interests benefit most from news about diplomatic progress. We find that the stock returns of firms owned by targeted political elites respond especially sharply to such news, though other listed firms unconnected to these elites also benefit from progress towards sanctions relief. These results indicate the ‘bluntness’ of sanctions on Iran, but also provide evidence of their effectiveness in generating economic incentives for elite policymakers to negotiate a deal for sanctions relief.
    JEL: F51
    Date: 2019
  8. By: Adnan Mazarei (Peterson Institute for International Economics)
    Abstract: Suffering under Western sanctions and security challenges, Iran faces problems as well from its fragile banking system, which has been languishing for decades. Liquidity and solvency weaknesses pose a growing risk to the country’s financial stability. The sanctions reimposed by the United States in 2018 have heightened these vulnerabilities, but the problems also result from the heavy-handed role of the state, corruption, and the Central Bank of Iran’s failure to regulate and supervise the system. Iran’s ability to avoid a run on its banks is aided by their reliance on liquidity assistance, deposit insurance, and regulatory forbearance from the central bank. Depositors are forced to be patient because they have limited options to invest elsewhere. Iran has thus avoided a full-blown banking crisis. But the situation is not sustainable. Banks remain susceptible to external shocks, which could come from a complete halt to oil exports or war.
    Date: 2019–06

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