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Uncertain Times in Lebanon: How Policy Shocks Ripple through MENA Markets

Author

Listed:
  • altug, sumru
  • barakat, majdy
  • Dagher, Leila
  • uluceviz, erhan

Abstract

Despite its small size, Lebanon’s chronic crises send financial shockwaves across the Middle East and North Africa. This column uses a Twitter-based index of economic policy uncertainty to track Lebanon’s instability and shows that it transmits financial shocks to seven MENA economies, with spillovers are strongest for Egypt, Jordan, and smaller Gulf states. Real-time policy uncertainty signals can help regional policymakers and investors manage risk and improve financial resilience.

Suggested Citation

  • altug, sumru & barakat, majdy & Dagher, Leila & uluceviz, erhan, 2025. "Uncertain Times in Lebanon: How Policy Shocks Ripple through MENA Markets," MPRA Paper 128302, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:128302
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    References listed on IDEAS

    as
    1. Elsayed, Ahmed H. & Yarovaya, Larisa, 2019. "Financial stress dynamics in the MENA region: Evidence from the Arab Spring," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 62(C), pages 20-34.
    2. Balcilar, Mehmet & Elsayed, Ahmed H. & Hammoudeh, Shawkat, 2023. "Financial connectedness and risk transmission among MENA countries: Evidence from connectedness network and clustering analysis1," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 82(C).
    3. Scott R. Baker & Nicholas Bloom & Steven J. Davis, 2016. "Measuring Economic Policy Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(4), pages 1593-1636.
    4. Oussama Abi Younes & Leila Dagher & Ibrahim Jamali & Paul Makdissi, 2024. "Quantifying Turbulence: Introducing a Multi-crises Impact Index for Lebanon," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 175(1), pages 1-24, October.
    5. Leila Dagher & Fadi Nicholas Nassar & Ola Sidani, 2025. "From margins to mainstream: pathways to resilience and reform in Lebanon’s urban informal sector," Third World Quarterly, Taylor & Francis Journals, vol. 46(9), pages 1059-1078, June.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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