In this paper we empirically examine the operation of the traditional Keynesian interest rate channel of the monetary policy transmission mechanism in five potential inflation targeting economies in the MENA region and compare it with fourteen inflation targeting (IT) emerging market economies (EMEs) using panel data analysis. Contrary to some existing studies, our empirical results suggest that private consumption and investment in both groups of countries are sensitive to movements in real interest rates. Moreover, we find that the adoption of IT did not significantly alter the operation of the interest rate channel in IT EMEs. Also, the interest rate elasticities of private consumption and private investment vary with the level of development of the domestic financial market. Finally, capital account liberalization have opposite effects on private consumption and private investment in the two groups of countries.
International Monetary Fund. External Relations Dept.
During a conference on trade facilitation in Algiers, November 21–22, IMF Managing Director Rodrigo de Rato called for greater regional economic integration among the Maghreb countries, which he said could play a crucial role in propelling economic reforms. De Rato, who joined top economic policymakers from Algeria, Morocco, and Tunisia, said greater integration—which could create a market of more than 75 million consumers—would improve economic efficiency, attract more foreign investors, and create opportunities for mutually beneficial trade within the region.
The Financial System Stability Assessment of Morocco reviews the reform program that is aimed at establishing a modern, market-oriented financial system that optimizes the mobilization of savings and the allocation of financial resources. It reviews the modernization of the banking sector and the development of competition within the sector, development of financial markets, and removal of constraints on financial system activity. It also provides reports on the Observance of Standards and Codes on Insurance Regulation, Securities Regulation, Payment Systems, and Monetary and Financial Policy Transparency.
Morocco has been able to establish macroeconomic stability and industrial country levels of inflation, despite adverse weather conditions and terms-of-trade developments. Executive Directors welcomed these developments, and stressed the need to reduce unemployment and poverty. They appreciated the robust banking system, and emphasized the need to tighten macroeconomic policies and accelerate structural reforms. They commended the efforts taken in improving the timeliness and dissemination of statistical data, and agreed to undertake a Report on the Observance of Standards and Codes on statistics.
Contents include: basic data and social demographic indicators, 1971-95. Liberalizing the economy -- structural reform issues: reform of the fiscal system; public enterprise reform and increased scope for private sector activity; price liberalization and reform of consumer subsidies; environmental issues; financial sector; factor markets; and exchange system liberalization. Labor market developments; recent trends; structure of unemployment; reasons for unemployment; reforming labor markets. Determinants of nongovernment investment, 1972-95: nongovernment investment data; estimates of investment functions; explaining the performance of nongovernment investment. The associaiton agreement and the new fisheries agreement between Morocco and the EU. Statistical tables.
Amer Bisat, Mr. Mohamed A. El-Erian, Mr. Mahmoud El-Gamal, and Mr. Francesco P Mongelli
The paper considers investment and growth in the Middle East and North Africa (MENA) region. Notwithstanding cross-country differences, investment as a whole has been too low, too heavily tilted toward the public sector, too highly dependent on external influences, and less productive than in many other regions. Improving the region’s investment performance is critical if policymakers are to succeed in increasing the region’s economic growth rate. After discussing the relationship between investment and growth, the paper analyzes the investment responsiveness of various countries in the region and notes the policy priorities for strengthening the basis for rapid and sustained economic growth.
Recent developments at both the international and national levels - including the globalization of financial markets and the wave of liberalization, deregulation, and privatization- have pushed the issue of financial markets to the forefront of the development agenda. This book, edited by Said El-Naggar, comprises the proceedings of a seminar held in Abu Dhabi in January 1994. It provides a comprehensive analysis of various aspects of capital markets in general and particularly in the Arab countries.
This volume, edited by Said El-Naggar, examines the impact of macro- and microeconomic policies on the investment climate in the Arab countries, the efficiency of public investment, and the role of foreign direct investment.
This paper examines the policy implications of structural changes in financial markets. Domestic financial markets have become less segmented, and the major financial centers more integrated. At the same time, the structural changes in financial markets have improved efficiency by lowering intermediation costs, increasing the ability to hedge financial risks associated with currency, interest rate, and price volatility and opening up access to new sources of savings. The widespread application of computer and telecommunications technology to financial markets has permitted markets to process a significantly larger volume of transactions.