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The Economics of Political Transitions: Implications for the Arab Spring

  • Padamja Khandelwal
  • Agustin Roitman
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    Over the past two years, ongoing political transitions in many Arab countries have led to social unrest and an economic downturn. This paper examines comparable historical episodes of political instability to derive implications for the near- and medium-term economic outlook in the Arab countries in transition. In general, past episodes of political instability were characterized by a sharp deterioration in macroeconomic outcomes and a sluggish recovery over the medium term. Recent economic developments in the Arab countries in transition seem to be unfolding along similar lines, although the weak external environment and large fiscal vulnerabilities could result in a prolonged slump.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 13/69.

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    Length: 13
    Date of creation: 13 Mar 2013
    Date of revision:
    Handle: RePEc:imf:imfwpa:13/69
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    1. Ari Aisen & Francisco J. Veiga, 2010. "How does political instability affect economic growth?," Working Papers CEB 10-055, ULB -- Universite Libre de Bruxelles.
    2. Roubini, Nouriel & Swagel, Phillip & Ozler, Sule & Alesina, Alberto, 1996. "Political Instability and Economic Growth," Scholarly Articles 4553024, Harvard University Department of Economics.
    3. Aisen, Ari & Veiga, Francisco Jose, 2006. "Does Political Instability Lead to Higher Inflation? A Panel Data Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(5), pages 1379-1389, August.
    4. Alesina, Alberto, et al, 1996. " Political Instability and Economic Growth," Journal of Economic Growth, Springer, vol. 1(2), pages 189-211, June.
    5. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
    6. Caroline Freund & Mélise Jaud, 2014. "Regime Change, Democracy, and Growth," Working Paper Series WP14-1, Peterson Institute for International Economics.
    7. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
    8. Paul J. Burke & Andrew Leigh, 2010. "Do output contractions trigger democratic change?," CEPR Discussion Papers 633, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    9. Tobias N. Rasmussen, 2004. "Macroeconomic Implications of Natural Disasters in the Caribbean," IMF Working Papers 04/224, International Monetary Fund.
    10. Freund, Caroline & Jaud, Mélise, 2013. "Regime Change, Democracy and Growth," CEPR Discussion Papers 9282, C.E.P.R. Discussion Papers.
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