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http://hdl.handle.net/11129/1945
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Title: | Sources of Macroeconomic Fluctuations in MENA Countries |
Authors: | Mehmet, Balcılar Kemal, Bağzıbağlı |
Keywords: | MENA region VAR model macroeconomic fluctuations |
Issue Date: | 2010 |
Citation: | Balcilar, Mehmet, & Bagzibagli, Kemal (2010). Sources of Macroeconomic Fluctuations in MENA Countries, MPRA Paper 44351, University Library of Munich, Germany. |
Abstract: | A close examination of the MENA region economies reveals a number of
fundamental sources of macroeconomic fluctuations. These include economic factors
such as exchange rate instability, large public debt, current account deficits, and
escalation of inflation. The political factors such as government instability,
corruption, bureaucracy, and internal conflicts also are major sources of
macroeconomic instability. Thus, the sources of macroeconomic fluctuations in these
countries are expected to be inhomogeneous. This paper determines sources of
macroeconomic fluctuations for 16 MENA economies using a structural VAR model.
By imposing long-run restrictions on a VAR model, we identify four structural
shocks: nominal demand, relative demand, supply, the world output, and imported
input price shocks. Overall, the results show some similarities for the source of
macroeconomic fluctuations in these, but also some important differences as well.
We find important differences even among countries with similar macroeconomic
conditions, such as the oil exporters and oil importers. Although, oil prices and world
output are significant sources of macroeconomic fluctuations in oil exporters, in
almost all countries they do not have the highest share. There is one clear common
finding of the paper: For all countries, the long-run sources of output fluctuations are
the real supply and/or real demand shocks. External shocks are secondary for all
countries. The sources of short-run and price fluctuations are inhomogeneous and
dominant variables are mostly determined by country specific factors. |
Description: | The file in this item is the pre-print version of the article (unrefereed author’s copy). |
URI: | http://hdl.handle.net/11129/1945 |
Appears in Collections: | BE – Journal Articles: Pre-Prints (Pre-Refereeing Author Versions) – Business and Economics
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