nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2020‒06‒15
ten papers chosen by
Paul Makdissi
Université d’Ottawa

  1. The effect of the epidemic between the Malthus perspective and the revival of economic growth for some countries in North Africa and the Middle East By Abderraouf Mtiraoui; Hend Hassen Khémiri
  2. Human Capital and Economic Growth in Egypt By Merna Mohamed Esmat Hefnawi; Hebatallah Ghoneim
  3. The Impact of Financial Sanctions: The Case of Iran 2011-2016 By Saeed Ghasseminejad; Mohammad R. Jahan-Parvar
  4. Trends and Decomposition Growth Analysis of the Most Important Cereal Crops in Egypt By El-Rasoul, Ahmed Abou El-Yazid; Shehab, Sameh M. Hassan; Maghraby, Heba El-Sayed
  5. On the Heterogeneous Effects of Sanctions on Trade and Welfare: Evidence from the Sanctions on Iran and a New Database By Felbermayr, Gabriel; Syropoulos, Constantinos; Yalcin, Erdal; Yotov, Yoto
  6. COVID-19 and Emerging Markets: An Epidemiological Multi-Sector Model for a Small Open Economy with an Application to Turkey By Cem Çakmaklı; Selva Demiralp; Ṣebnem Kalemli-Özcan; Sevcan Yesiltas; Muhammed A. Yildirim
  7. Refugee Mobility: Evidence from Phone Data in Turkey By Michel Beine; Luisito Bertinelli; rana Comertpay; Anastasia Litina; Jean-François Maystadt; Benteng Zou
  8. Monthly Report No. 12/2019 By Alexandra Bykova; Mahdi Ghodsi; Philipp Heimberger; Stefan Jestl
  9. Education, neopatrimonialism, and revolutions By Raouf Boucekkine; Rodolphe Desbordes; Paolo Melindi-Ghidi
  10. Global Value Chains and the Productivity of Firms in MENA countries: Does Connectivity Matter? By Rym AYADI; Giorgia GIOVANNETTI; Enrico MARVASI; Chahir ZAKI

  1. By: Abderraouf Mtiraoui (Université de Sousse); Hend Hassen Khémiri (Université de Sousse)
    Abstract: The aim of this paper is to study the relationship between the rate of demographic growth through epidemics and economic growth to verify the Malthus perspective on the one hand.And on the other hand, this work follows a methodology describing a comparative analysis between the effect of two types of population with and without pessimism of Malthus on the economic growth rate of GDP per capita over the last five years as cut data cross-section for some countries in North Africa and the Middle East.
    Abstract: Le but de ce papier est d'étudier la relation entre le taux de croissance de démographique à travers d'épidémie sur la croissance économique pour vérifier l'optique Malthus d'une part. Et d'autre part, ce travail suit une méthodologie décrivant une analyse comparative entre l'effet deux types de population avec et sans pessimisme de Malthus sur le taux de croissance économique du PIB par tête sur une période de derniers cinq ans comme des données coupe transversale pour quelques pays de Nord d'Afrique et Moyen Orient. Abstract: The aim of this paper is to study the relationship between the rate of demographic growth
    Keywords: Growth,Panal Estimation,Malthus,Population,Estimation de panel,Croissance
    Date: 2020–05–20
  2. By: Merna Mohamed Esmat Hefnawi (German University in Cairo (GUC)); Hebatallah Ghoneim (German University in Cairo (GUC))
    Abstract: The role that human capital plays in the economic growth of the countries has been an ongoing debate through the last two decades and has shown various empirical results over this period. This study aims is to analyze and investigate the magnitude of relationship between human capital and the economic growth in Egypt since the Egyptian population has exceeded 96 million which shows that human capital is one of the most important resources Egypt has. This raises an important question which is; how this high population can contribute in the economic development of the Egyptian economic system and achieve the desired economic growth?. To investigate this question, two models are examined; a macroeconomics model in addition to a microeconomics model. The results of this study help evaluating the government education and health expenditure policies, giving recommendations for successful social policies, and providing a direction for the needed investments in Egypt.
    Keywords: Economic Development, Economic Growth, Education, Egypt, Experience, Health, Human Capital Earnings Model, Human Capital, Income Distribution, Solow Growth Model
    JEL: D04 I25 J24
    Date: 2020–02
  3. By: Saeed Ghasseminejad; Mohammad R. Jahan-Parvar
    Abstract: This study provides a detailed analysis of the impact of financial sanctions on publicly traded companies. We consider the effect of imposing and lifting sanctions on the target country's traded equities and examine the differences in the reaction of politically connected firms and those without such connections. The paper focuses on Iran due to (1) its sizable financial markets, (2) imposition of sanctions of varying severity and duration on private and state-owned companies, (3) the significant presence of politically connected firms in the stock market, and (4) the unique event of the 2015 nuclear deal, resulting in fairly rapid lifting of a sizable portion of imposed sanctions. We find that sanctions affect politically connected firms more than ordinary firms, have lasting negative effects on profitability ratios, and that politically connected firms stock prices bounce back more slowly after removal of sanctions. Firms targeted by financial sanctions decrease their leverage and increase their cash holding to manage their perceived increase in risk profile.
    Keywords: National security; Financial sanctions; Political connections; Event study; Capital structure; Iran
    JEL: D74 F51 G32 G39 H56
    Date: 2020–05–26
  4. By: El-Rasoul, Ahmed Abou El-Yazid; Shehab, Sameh M. Hassan; Maghraby, Heba El-Sayed
    Abstract: This research aims to analyze the growth performance of the most important cereal crops of Egypt agriculture (wheat, rice, and maize) and the sources of the production growth of these crops during the period 1975-2017. This analysis is to implement appropriate policies that would enhance the production increase of these crops using component analysis. Based on the results of the Chow Breakpoint test, the study was divided into three periods: 1975-1986, 1987-2000 and 2001-2017, in addition to the full period 1975-2017.The results showed that the growth of wheat, rice and maize production during the study periods depends on changes in yield more than changes in area. So, the study emphasizes that the vertical expansion has a greater impact than the horizontal expansion. This is reflecting the effect of scientific research and development (R&D) on increasing cereal crops in Egypt.
    Keywords: Compound growth rate, Decomposition analysis of growth, Effect of area and yield, Cereal crops trends in Egypt.
    JEL: E23 Q15 Q16 Q18
    Date: 2020–04
  5. By: Felbermayr, Gabriel (Kiel Institute & Kiel University); Syropoulos, Constantinos (Drexel University); Yalcin, Erdal (HTWG Konstanz); Yotov, Yoto (Drexel University)
    Abstract: Using a new, comprehensive database, we study the impact of sanctions on international trade and welfare. Specifically, capitalizing on the latest developments in the structural gravity literature, we quantify the partial and general equilibrium effects of sanctions. Starting with a broad evaluation of the impact of sanctions, we carefully investigate the case of Iran. We find that the effects are significant but also widely heterogeneous across sanctioning countries and dependent on the direction of trade, even within the European Union. We also perform a counterfactual analysis of removing the sanctions on Iran, which translates our partial estimates into sizable and heterogeneous (across both countries and sectors), but also intuitive, general equilibrium effects within the same framework.
    Keywords: Sanctions; Effectiveness of Sanctions; Structural Gravity
    JEL: F13 H50 N40
    Date: 2020–05–16
  6. By: Cem Çakmaklı; Selva Demiralp; Ṣebnem Kalemli-Özcan; Sevcan Yesiltas; Muhammed A. Yildirim
    Abstract: The COVID-19 crisis has the potential to turn into the biggest emerging market (EM) crisis since 1980s. We quantify the macroeconomic effects of COVID-19 for a small open economy by calibrating a SIR-multi-sector-macro model to Turkey. We measure sectoral supply shocks utilizing teleworking and physical job proximity, and sectoral demand shocks with credit card purchases. Both shocks are also affected from changing infection rates under different lockdown scenarios. Our results show that the optimal policy, which yields the lowest economic cost and saves the maximum number of lives, can be achieved under a full lockdown. Being an open economy amplifies the economic costs through two main channels. First, the demand shock has domestic and external components. Second, the initial shock is magnified due to domestic and international input-output linkages. The policy options are limited given the low fiscal space to fight the pandemic and urgent external finance needs to rollover the foreign currency debt. We draw parallels between the policies employed during 2001 crisis in Turkey and discuss pros and cons of policy options to deal with the economic fallout from COVID-19.
    JEL: E01 F23 F41
    Date: 2020–05
  7. By: Michel Beine (CREA, Université du Luxembourg); Luisito Bertinelli (CREA, Université du Luxembourg); rana Comertpay (CREA, Université du Luxembourg); Anastasia Litina (University of Ioannina, Greece); Jean-François Maystadt (Unversity of Antwerpen, Belgium); Benteng Zou (CREA, Université du Luxembourg)
    Abstract: Our research report employs the D4R data and combines it to several other sources to study one of the multiple aspects of integration of refugees, namely the mobility of refugees across provinces in Turkey. In particular, we employ a standard gravity model to empirically estimate a series of determinants of refugee movements. These include the standard determinants such as province characteristics, distances across provinces, levels of income, network effects as well as some refugee-specific determinants such as the presence of refugee camps and the intensity of phone call interaction among refugees. Importantly, we explore the effect of certain categories of news events, notably protests, violence and asylum grants. Considering news as an indicator of policy implemented at the provincial level we gain a better understanding as to how policy can facilitate refugee mobility and thus enhance integration. To benchmark our findings, we estimate the same model for the mobility of individuals with a non-refugee status.
    Keywords: Social Integration, Refugee Mobility, Gravity Model of Migration, Poisson
    JEL: J6
    Date: 2019
  8. By: Alexandra Bykova (The Vienna Institute for International Economic Studies, wiiw); Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Philipp Heimberger (The Vienna Institute for International Economic Studies, wiiw); Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Chart of the month Gender gap in digital skills in European countries by Alexandra Bykova Opinion Corner Iran-US negotiations are now likelier than before by Mahdi Ghodsi Iran’s new readiness to negotiate with the US is partly due to the recent social unrest – an indirect consequence of the US sanctions. Ahead of possible negotiations, it has resumed some nuclear activities beyond the limitations of the JCPOA deal in order to improve its bargaining chips. A new deal between Iran and the US may ultimately benefit the political careers of both Hassan Rouhani and Donald Trump. Globalisation and inequality more than just a spurious correlation? by Stefan Jestl In recent years, globalisation has been under attack. Even though it has brought with it a boost in economic development globally since the 1980s, it is increasingly blamed for contributing to widening income inequality, in particular within advanced economies. Italy's crisis the fault line of the euro area by Philipp Heimberger Italy has been spared the initiation of an excessive deficit procedure due to the violation of EU budget rules for the time being. However, it is to be expected that the dispute between the Italian authorities and the European Commission over Italy’s fiscal policy will enter a new round in the foreseeable future against the background of Italy's on-going economic malaise – with great significance for the rest of the euro area. Monthly and quarterly statistics for Central, East and Southeast Europe
    Keywords: digital skills, gender gap, nuclear programme, economic sanctions, JCPOA, globalisation, wage inequality, Gini coefficient, fiscal policy, public debt, optimal currency area
    Date: 2019–12
  9. By: Raouf Boucekkine (Aix-Marseille Univ, CNRS, EHESS, Ecole Centrale, AMSE, Marseille, France); Rodolphe Desbordes (SKEMA Business School-UCA); Paolo Melindi-Ghidi (EconomiX, Paris-Nanterre University & AMSE Aix-Marseille University, France)
    Abstract: The occurrence of some revolutionary episodes seems initially puzzling. For example, before the 'Arab Spring', macroeconomic conditions were improving, the political leaders had been in power for a long time, and the autocrats had shown an apparent interest in the welfare of their population by investing in human capital. We argue that such a paradox can be solved by considering that high education levels are incompatible with the features characterising strong neopatrimonial states. We develop this intuition in a simple theoretical model and we test our prediction in a sequential empirical study of regime changes and regime breakdowns in a large panel of countries. We indeed find that a regime change is more likely in countries combining high neopatrimonialism and high education levels. Moreover, when a regime change happens under these circumstances, a revolution is the most likely type of regime breakdown. These results help to understand the 'Arab Spring' but are not specific to the Arab world.
    Keywords: education, neopatrimonialism, regime breakdown, regime change, revolution
    JEL: D74 P16
    Date: 2020–05
  10. By: Rym AYADI; Giorgia GIOVANNETTI; Enrico MARVASI; Chahir ZAKI
    Abstract: We provide new evidence on the participation of firms within Global Value Chains (GVCs) for a large pool of MENA countries included in the World Bank Enterprise Surveys (WBES). Making use of several firm-level GVC participation indices, we find a positive association with firm productivity gains. Based on this result, we further investigate the complexity of GVC relationships and examine how sector/country connectivity affects firm productivity. Using a multi-level model, we augment our analysis by including centrality indicators calculated on the intermediate trade network, constructed from the EORA input-output tables. Positioning within the network structure of trade in intermediate products also plays a role. Our results indicate a positive effect of the connectivity of the sector on the Total Factor Productivity (TFP) of firms. Results remain robust after we control for the endogeneity between firm productivity and participation in GVCs.
    Keywords: global value chains, firm heterogeneity, MENA region, trade networks, productivity.
    JEL: F14 F15 L23 L25
    Date: 2020

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