Financial Market Integration and Macroeconomic Volatility in the MENA Region: An Empirical Investigation
AbstractUsing panel data regression models this study examines empirically the impact of regional and international financial integration on macroeconomic volatility in the developing economies of the MENA region over the period 1980–2002. Our empirical results indicate that financial openness is associated with an increase in consumption volatility, contrary to the notions of improved international risk-sharing opportunities through financial integration. Our empirical findings emphasize the role of sound fiscal and monetary policies in driving macroeconomic volatility. In regard to structural reforms, the development of the domestic financial sector is critical, as a high degree of financial sector development is significantly associated with lower macroeconomic volatility. We argue that enhancing regional financial integration might constitute a venue to circumvent the vulnerability of the small open MENA economies to external shocks, and a mean to enhance consumption smoothing opportunities, as well as international financial integration.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by De Gruyter in its journal Review of Middle East Economics and Finance.
Volume (Year): 3 (2005)
Issue (Month): 3 (December)
Contact details of provider:
Web page: http://www.degruyter.com
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Senay, Ozge, 1998. "The Effects of Goods and Financial Market Integration on Macroeconomic Volatility," The Manchester School of Economic & Social Studies, University of Manchester, vol. 66(0), pages 39-61, Supplemen.
- Reinhart, Carmen & Kaminsky, Graciela, 1999.
"The twin crises: The causes of banking and balance of payments problems,"
14081, University Library of Munich, Germany.
- Carmen M. Reinhart & Graciela L. Kaminsky, 1999. "The Twin Crises: The Causes of Banking and Balance-of-Payments Problems," American Economic Review, American Economic Association, vol. 89(3), pages 473-500, June.
- Graciela L. Kaminsky & Carmen M. Reinhart, 1996. "The twin crises: the causes of banking and balance-of-payments problems," International Finance Discussion Papers 544, Board of Governors of the Federal Reserve System (U.S.).
- Ross Levine, 1997.
"Financial Development and Economic Growth: Views and Agenda,"
Journal of Economic Literature,
American Economic Association, vol. 35(2), pages 688-726, June.
- Levine, Ross, 1996. "Financial development and economic growth : views and agenda," Policy Research Working Paper Series 1678, The World Bank.
- Obstfeld, Maurice & Rogoff, Kenneth, 1995.
"Exchange Rate Dynamics Redux,"
Journal of Political Economy,
University of Chicago Press, vol. 103(3), pages 624-60, June.
- Maurice Obstfeld & Kenneth Rogoff, 1996. "Exchange Rate Dynamics Redux," NBER Working Papers 4693, National Bureau of Economic Research, Inc.
- Maurice Obstfeld and Kenneth Rogoff., 1995. "Exchange Rate Dynamics Redux," Center for International and Development Economics Research (CIDER) Working Papers C95-048, University of California at Berkeley.
- Obstfeld, Maurice & Rogoff, Kenneth, 1995. "Exchange Rate Dynamics Redux," CEPR Discussion Papers 1131, C.E.P.R. Discussion Papers.
- Edwards, Sebastian, 1996. "Exchange-Rate Anchors, Credibility, and Inertia: A Tale of Two Crises, Chile and Mexico," American Economic Review, American Economic Association, vol. 86(2), pages 176-80, May.
- Senhadji, Abdelhak S., 1998. "Dynamics of the trade balance and the terms of trade in LDCs: The S-curve," Journal of International Economics, Elsevier, vol. 46(1), pages 105-131, October.
- Mansoorian, Arman & Neaime, Simon, 2003. "Durable goods, habits, time preference, and exchange rates," The North American Journal of Economics and Finance, Elsevier, vol. 14(1), pages 115-130, March.
- Allen C. Head, 1995. "Country Size, Aggregate Fluctuations, and International Risk Sharing," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4b), pages 1096-1119, November.
- Mohamed El Hedi Arouri & Christophe Rault, 2010.
"Les effets des fluctuations du prix du pétrole sur les marchés boursiers dans les pays du Golfe,"
Presses de Sciences-Po, vol. 0(5), pages 945-959.
- Mohamed El Hedi Arouri & Christophe Rault, 2010. "Les effets des fluctuations du prix du pétrole sur les marchés boursiers dans les pays du Golfe," Working Papers hal-00507825, HAL.
- Emilio Espino & Julian Kozlowski & Juan M. Sánchez, 2013. "Regionalization vs. globalization," Working Papers 2013-002, Federal Reserve Bank of St. Louis.
- Mohamed El Hedi Arouri & Christophe Rault, 2010.
"On The Influence of Oil Prices on Stock Markets: Evidence from Panel Analysis in GCC Countries,"
538, Economic Research Forum, revised Aug 2010.
- Christophe Rault & Mohamed El Hedi AROURI, 2009. "On the influence of oil prices on stock markets: Evidence from panel analysis in GCC countries," William Davidson Institute Working Papers Series wp961, William Davidson Institute at the University of Michigan.
- Mohamed El hedi Arouri & Christophe Rault, 2009. "On the Influence of Oil Prices on Stock Markets: Evidence from Panel Analysis in GCC Countries," CESifo Working Paper Series 2690, CESifo Group Munich.
- Ben Naceur, Samy & Ghazouani, Samir & Omran, Mohammed, 2008. "Does stock market liberalization spur financial and economic development in the MENA region?," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 673-693, December.
- Hideaki Hirata & M. Ayhan Kose & Christopher Otrok, 2013.
"Regionalization vs. Globalization,"
IMF Working Papers
13/19, International Monetary Fund.
- Hideaki Hirata & M. Ayhan Kose & Christopher Otrok, 2013. "Regionalization vs. Globalization," KoÃ§ University-TUSIAD Economic Research Forum Working Papers 1302, Koc University-TUSIAD Economic Research Forum.
- Hideaki Hirata & M. Ayhan Kose & Christopher Otrok, 2013. "Regionalization vs. Globalization," CAMA Working Papers 2013-09, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- HIRATA Hideaki & Ayhan KOSE & Christopher OTROK, 2013. "Regionalization vs. Globalization," Discussion papers 13004, Research Institute of Economy, Trade and Industry (RIETI).
- Mohamed Arouri & Christophe Rault, 2010.
"Oil Prices and Stock Markets: What Drives What in the Gulf Corporation Council Countries,"
CEPII research center, issue 122, pages 41-56.
- Mohamed El Hedi Arouri & Christophe Rault, 2010. "Oil Prices and Stock Markets: What Drives what in the Gulf Corporation Council Countries?," CESifo Working Paper Series 2934, CESifo Group Munich.
- Christophe Rault & ohamed El Hedi AROURI, 2009. "Oil prices and stock markets: what drives what in the Gulf Corporation Council countries?," William Davidson Institute Working Papers Series wp960, William Davidson Institute at the University of Michigan.
- Mohamed El Hedi Arouri & Duc Khuong Nguyen, 2010. "Time-varying characteristics of cross-market linkages with empirical application to Gulf stock markets," Managerial Finance, Emerald Group Publishing, vol. 36(1), pages 57-70, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.