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Are MENA Countries Reaping the Benefits of Inflows?


  • Magda Kandil
  • Ida Aghdas Mirzaie


Using data for a sample of developing countries, we analyse the effects of external flows, namely migrants’ remittances and FDI flows, on real output growth, price inflation and components of aggregate demand. The historical evidence indicates unstable patterns of FDI inflows to a sample of nine MENA countries. In contrast, remittances flows appear to be more stable over time in recipient countries. Except for Jordan, real GDP growth does not vary significantly with FDI inflows. Tunisia provides the only significant evidence of an increase in price inflation in response to FDI, which is coupled with a significant increase in private investment. FDI flows stimulate a significant increase in imports in Egypt. Remittances inflows appear, in general, a more important determinant of macroeconomic performance. Remittances inflows stimulate real output growth in Jordan, and decrease price inflation in Egypt and Tunisia. The increase in growth in Jordan is coupled with an increase in private consumption, private investment, real exports and imports with respect to remittances inflows. Moreover remittances increase export growth in Tunisia.

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  • Magda Kandil & Ida Aghdas Mirzaie, 2009. "Are MENA Countries Reaping the Benefits of Inflows?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 10(3), pages 159-192, July.
  • Handle: RePEc:wej:wldecn:389

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    References listed on IDEAS

    1. Gregory Mankiw, N. & Swagel, Phillip, 2006. "The politics and economics of offshore outsourcing," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 1027-1056, July.
    2. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
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    1. repec:bpj:glecon:v:17:y:2017:i:1:p:19:n:1 is not listed on IDEAS
    2. Kiawu, James & Jones, Keithly G, 2013. "Implications of food aid and remittances for West African food import demand," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(1), July.

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