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Determinants of Growth and Inflation in Southern Mediterranean Countries

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  • Coutinho, Leonor
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    Abstract

    Despite significant economic reforms in many EU neighbouring countries in the Southern Mediterranean, their growth performance has on average been subdued. This study analyses the differences in growth performance and macroeconomic stability across Mediterranean countries, to draw lessons for the future. The main findings are that Southern Mediterranean countries should benefit from closer ties with the EU that result in higher levels of trade and FDI inflows, once the turbulence of the ‘Arab Spring’ is resolved, and from the development of financial markets and infrastructure. They will also benefit in keeping inflation under control, which will depend in great part on their ability to maintain fiscal discipline and sustainable current accounts. One of the main challenges for the region will be to implement structural reforms that can help them absorb a large pool of unemployed without creating upward risks to inflation.

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    File URL: http://www.ceps.eu/system/files/book/2012/03/No%2010%20Coutinho%20Determinants%20of%20Growth%20and%20Inflation.pdf
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    Bibliographic Info

    Paper provided by Centre for European Policy Studies in its series CEPS Papers with number 6736.

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    Length: 36 pages
    Date of creation: Mar 2012
    Date of revision:
    Handle: RePEc:eps:cepswp:6736

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    Cited by:
    1. Emanuel Bergasse & Wojciech Paczyński & Marek Dąbrowski & Luc De Wulf, 2013. "The Relationship Between Energy and Socio-Economic Development in the Southern and Eastern Mediterranean," CASE Network Reports 0112, CASE-Center for Social and Economic Research.
    2. Tsani, Stella & Paroussos, Leonidas & Fragiadakis, Costas & Charalambidis, Ioannis & Capros, Pantelis, 2013. "Female labour force participation and economic growth in the South Mediterranean countries," Economics Letters, Elsevier, vol. 120(2), pages 323-328.
    3. Robin Carruthers, 2012. "Transport Infrastructure for MED11 Countries," CASE Network Reports 0108, CASE-Center for Social and Economic Research.

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