Recoveries in the Middle East, North Africa, and Pakistan: Have Macroeconomic Policies Been Effective?

31 Pages Posted: 26 May 2010

See all articles by Dalia Hakura

Dalia Hakura

International Monetary Fund (IMF)

Francesco Grigoli

International Monetary Fund (IMF)

Date Written: May 2010

Abstract

This paper identifies and documents the properties of output gap recessions and recoveries in the Middle East, North Africa, and Pakistan (MENAP) during the 1980 to 2008 period. It goes on to investigate the key determinants of the recoveries. The duration of MENAP countries’ recessions and recoveries has increased from the 1990s to the 2000s. MENAP hydrocarbon exporting countries’ recessions were on average more pronounced in the 2000s, and hydrocarbon importing countries’ recessions milder. Fiscal policy is found to have played a key role during the recoveries to potential output, although with weaker effects for MENAP countries that are more open to trade. Monetary policy is found to have been less effective. This is likely to be related to the fact that many of the MENAP countries have fixed exchange rate regimes and hence have limited room for active monetary policy.

Keywords: Economic Models, Economic Recession, Economic Recovery, Fiscal Policy, Hydrocarbons, Investment, Middle East, Monetary Policy, North Africa, Oil Exporting Countries, Pakistan, Production Growth, Trade Liberalization

Suggested Citation

Hakura, Dalia and Grigoli, Francesco, Recoveries in the Middle East, North Africa, and Pakistan: Have Macroeconomic Policies Been Effective? (May 2010). IMF Working Papers, Vol. , pp. 1-30, 2010. Available at SSRN: https://ssrn.com/abstract=1612592

Dalia Hakura

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Francesco Grigoli (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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