Exchange Rate Effects on The Short-run Growth in The Post-Civil Conflict MENA Countries
The Middle East and North Africa (MENA) is one of the tensest regions in the world, and civil conflicts occurring there are bloodier with a higher possibility of reoccurrence, and result in larger externalities. Above all, due to the common history, culture, and economic interests, the MENA countries are highly interconnected. This leads to a high level of political and military interferences causing security, political and economic instabilities. These instabilities motivate different prices, including the exchange rates, to fluctuate and, in turn, affect economic growth. Therefore, the current paper tries to identify the effects of this volatile channel on economic growth in the short-to-medium run post-conflict phase. Employing a panel-data technique, so we account for the endogeneity and country-specific unobserved characteristics, provides us with conclusive results proving the detrimental effect of exchange rate volatilities, particularly in populated MENA countries, during peaceful time. These results, however, are just suggestive in the post-conflict phase, due to data noisiness, and this supports making more investigations based on individual case studies.
To read the full working paper follow the link below
Hamati, S. (2019). Exchange Rate Effects on The Short-run Growth in The Post-Civil Conflict MENA Countries, Working paper,1 April 2019, Available at: https://www.ecesao.org/publications/publications-working_papers