Food and Global Crises impacts on Middle East and North African Region: What lesson can we learn for the future?

The recent crises concerning food and finances highlight the extreme fragility of the MENA countries and question the sustainability of the development processes. The economic and social impacts of these crises on the economies of the MENA region signal the magnitude of the challenges facing the region and the need to reorient its development policies. This paper intends to provide a comprehensive analysis of economic and social impacts of the two crises to help understanding, on one hand, the magnitude of the problem facing the region, and the need for a reorientation of the region’s development policies, on the other.Food Crisis, Financial Crisis, MENA Region

In Time of Troubles: Challenges and Prospects in the Middle East and North Africa

The recent crises concerning food and finances highlight the extreme fragility of the MENA countries and question the sustainability of the development processes. The social stress and economic instability caused by these challenges give a good indication of what might be expected in the future. This paper intends to provide a comprehensive analysis for understanding the major challenges faced by the region and the kind of internal impediments that will need to be dealt with in order to achieve a higher level of economic development and more resilience to external shocks.MENA region, Economic Fragility

Institutions, Governance and Technology catch-up in North Africa

This paper aims to analyse the effects of institution quality on technology catch-up in five North African countries (Algeria, Egypt, Morocco, Sudan and Tunisia) compared to 3 groups of developing and emerging countries (Sub Saharan Africa, Asia, and Latin America) over the period 1970-2005. The study adopts a two-stage methodology. In the first step we estimate the technology gap using the matafrontier approach. In second step we test the relationship between the technology gap and the quality of governance. The empirical results show that institutions (corruption, law and rules and investment climate) are very important in closing the technology gap and speeding up the technology catch-up. Other determinants of the technology gap are also identified: foreign direct investment, human capital and trade.metafrontier, technology gap, catching-up, efficiency, stochastic frontier, governance, North Africa

A re-examination of the Purchasing Power Parity using non-stationary dynamic panel methods : a comparative approach for developing and developed countries

The aim of this paper is to apply recent advances in the econometrics of non-stationary dynamic panel methods to examine the robustness of the PPP concept for a sample of 73 developed and developing countries. Our investigations indicate that the strong PPP is verified for OECD and MENA countries. However in Africa, Asia, Latin America and the PECO, PPP does not seem relevant to characterize the long-run behavior of the real exchange rate. A widening of our analysis field shows that the nature of the exchange rate regime doesn’t condition the validity of the PPP and that the PPP is more easily accepted in countries with high inflation than with low one.http://deepblue.lib.umich.edu/bitstream/2027.42/39956/3/wp570.pd

Does the Balassa-Samuelson Hypothesis Hold for Asian Countries? An Empirical Analysis using Panel Data Cointegration Tests

This paper tests empirically the Balassa-Samuelson (BS) hypothesis using annual data for 6 Asian countries. We apply new panel data cointegration techniques recently developed by Pedroni (2000) and we compare the results with those obtained with conventional Johansen (1995)’s time series cointegration tests. Whereas, standard time series approach turns out to be able to put in evidence a significant long-run relationship between real exchange rate and productivity differential; this relationship is strongly rejected for all countries using recent advances in the econometrics of non-stationary dynamic panel methods. Closer examinations of the three key components of the BS hypothesis enable us to identify clearly the causes of this empirical failure. We find that the absence of a positive long-run relationship between productivity differential and relative prices is the reason for this rejection.http://deepblue.lib.umich.edu/bitstream/2027.42/39889/3/wp504.pd

Testing for inflation convergence between the Euro Zone and its CEE partners

We investigate inflation convergence between the Euro Zone and its CEE partners using panel data methods that incorporate structural shifts. We find strong rejections of the unit root hypothesis, and therefore evidence of PPP, in the East-European countries for the 1995:1 to 2000:4 period.http://deepblue.lib.umich.edu/bitstream/2027.42/40154/3/wp768.pd

On the long-run determinants of real exchange rates for developing countries : Evidence from Africa, Latin America and Asia

The main goal of this paper is to tackle the empirical issues of the real exchange rate litterature by applying recently developed panel cointegration techniques to a structural long-run real exchange rate equation. We consider here a sample of 45 developing countries, divided into three groups according to geographical criteria: Africa, Latin America and Asia. Our investigations confirm that having a reference to assess the degree of distortion of real exchange rate is not as simple as it can be thought with the PPP concept. The real exchange rate is e?ectively at the centre of an economic spiral and its value depends on the economic specificities of each country. In other words, we don’t have a fixed and general norm but, for each economy, the real exchange rate trajectory depends on its development level, on the way economic policy is conducted, and on its position on the international market.http://deepblue.lib.umich.edu/bitstream/2027.42/39957/3/wp571.pd

Purchasing Power Parity for developing and developed countries. What can we learn from non-stationary panel data models?

The aim of this paper is to apply recently developed panel cointegration techniques proposed by Pedroni (1999, 2004) and generalized by Banerjee and Carrion-i-Silvestre (2006) to examine the robustness of the PPP concept for a sample of 80 developed and developing countries. We find that strong PPP is verified for OECD countries and weak PPP for MENA countries. However in African, Asian, Latin American and Central and Eastern European countries, PPP does not seem relevant to characterize the long-run behavior of the real exchange rate. Further investigations indicate that the nature of the exchange rate regime doesn't condition the validity of PPP which is more easily accepted in countries with high than low inflation.Purchasing power parity, real exchange rate, developed country, developing country, panel unit-root and cointegration tests.

A re-examination of the Purchasing Power Parity using non-stationary dynamic panel methods : a comparative approach for developing and developed countries

The aim of this paper is to apply recent advances in the econometrics of non-stationary dynamic panel methods to examine the robustness of the PPP concept for a sample of 73 developed and developing countries. Our investigations indicate that the strong PPP is verified for OECD and MENA countries. However in Africa, Asia, Latin America and the PECO, PPP does not seem relevant to characterize the long-run behavior of the real exchange rate. A widening of our analysis field shows that the nature of the exchange rate regime doesn’t condition the validity of the PPP and that the PPP is more easily accepted in countries with high inflation than with low one.Purchasing power parity, real exchange rate, developed country, developing country, panel unit-root and cointegration tests.

The sources of Real Exchange Fluctuations in Developing Countries : an Econometric Investigation

In this paper we address the two following questions: (1) what are the major sources of real exchange rate fluctuations in developing countries? (2) do economic policy makers have room to face possible real exchange rate fluctuations? To answer these questions, we estimate a structural VAR model for 3 developing countries (Morocco, The Philippines, Uruguay) and carry out the conventional exercises of impulse response functions and of variance decomposition of forecast error. Our investigatation suggest that domestic shocks dominate real exchange rate fluctuations and that the contribution of external shocks is relatively low. Besides, the low contribution of the nominal shock put into question monetary policies which seek to promote competitiveness through a currency devaluation. Moreover, our estimations confirm that the real exchange rate also depends on shocks on foreign interest rate and/or on the terms of exchange which can make it move from its equilibrium level. The budgetary tool therefore remains efficient to stabilize the real exchange rate with respect to possible external shocks.Serbia, post-socialist transformation, transition, blocked transition, entrepreneur, new entrepreneurs, spontaneous privatization