nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2019‒07‒15
three papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Drought and Property Prices: Empirical Evidence from Iran By Mohammad Reza Farzanegan; Mehdi Feizi; Hassan F. Gholipour
  2. Assessment of interest rate and credit transmission channels in a context of banking heterogeneity By Sinda Morsi Fattoum
  3. A Macro-Model to Monetary Transmission Analysis in Tunisia By Aymen Makni

  1. By: Mohammad Reza Farzanegan (Philipps-Universitaet Marburg); Mehdi Feizi (Ferdowsi University of Mashhad); Hassan F. Gholipour (Swinburne University of Technology)
    Abstract: This study demonstrates an economic consequence of climate change and water crises in Iran. It examines the effect of drought on housing prices, residential land prices, and housing rents in Iran. Using data from provinces of Iran from 1993 to 2015 and applying static and dynamic panel fixed effects estimators, we find evidence that an increase in the balance of water (reducing the severity of drought) within provinces has a positive effect on property prices. Our results have important implications for Iranian policymakers and property investors.
    Keywords: Drought; Water Crisis; Property Prices; Housing; Iran
    JEL: R21 R31 Q54
    Date: 2019
  2. By: Sinda Morsi Fattoum (Central Bank of Tunisia)
    Abstract: This paper analyses monetary transmission mechanism in Tunisia based on two approaches, an aggregate data analysis by using a Structural Vector Auto regressive (SVAR) model to assess the impact and the delay of transmission of monetary policy decisions and to identify through which of the interest rate channel or credit channel, monetary policy stances’ changes could affect the economy; and, a bank panel data analysis by employing an ARDL model to measure the reaction of the banks’ pricing policy to monetary policy changes. For the SVAR model, a “recursive” system was used to uncover the dynamic effects of monetary policy shocks. The empirical results show that the interest rate channel was more effective than the credit channel and that’s from the 8th quarter. For the ARDL model, the empirical results show that, taken into consideration of the heterogeneity of the banking system landscape, the banks pricing’s policy are highly dependent upon money market rate’s changes. In other words, the transmission to lending rates applied to households as well as to firms is almost complete.
    Date: 2019–06–27
  3. By: Aymen Makni (Central Bank of Tunisia)
    Abstract: In this paper, we develop a gap model based on a reduced form of the New Keynesian Model. The model offers various scenario structure tools which analyze the dynamics of key macroeconomic variables under diverse shocks and depicts their properties and historical decompositions. This framework rationalizes the monetary transmission mechanism as well as the effects of major shocks influencing the macroeconomic variables and can assess the role of monetary policy in reacting to observed and anticipated changes in inflation and other economic variables. This model provides a useful framework detailing monetary policy and helping policymakers mainly to react strongly to inflation.
    Keywords: Monetary Policy, Central Banks and Their Policies, Macroeconomic Model, Monetary Transmission Mechanism
    JEL: E52 E58 E10 E50
    Date: 2019–06

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