Capital Account Liberalization, Political Stability, and Economic Growth

Hamdaoui, Mekki; Ayouni, Saif Eddine; Maktouf, Samir

doi:10.1007/s13132-021-00723-y

Cited by 21 publications

(7 citation statements)

References 81 publications

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“…Similarly, inappropriate capital account liberalization, a deterioration of terms of trade, and an increase in the real interest rate cause a financial crisis in the full sample and marketbased systems. The identification of specific indicators causing financial crises aligns with existing literature on the role of capital account liberalization, terms of trade, and interest rates in financial instability, as noted by various studies (Hamdaoui et al, 2021;Frankel and Saravelos, 2012). The significance of inappropriate capital account liberalization, a deterioration of terms of trade, and an increase in the real interest rate as factors causing a financial crisis in the full sample and market-based systems aligns with research highlighting the role of external factors and interest rate movements in financial stability (Lestano et al, 2003;Qin and Luo, 2014).…”

Section: 31discrete Analysissupporting

confidence: 53%

“…Exchange rates play a pivotal role in financial crisis models due to their impact on external financing costs, solvency of borrowers, capital flows, trade volume, and current account balance (Lestano et al, 2003;Babecký et al, 2014;Hamdaoui et al, 2021). However, the real exchange rate is not able to reflect all pressures on national money (Jemovic and Marinkovic, 2021).…”

Section: Datamentioning

confidence: 99%

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Economic and financial crisis: a causal relationship analysis

MTIRAOUI,

HAMDAOUI,

Aroussi

et al. 2024

Preprint

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This paper aims to assess the nature of the link between financial and economic crises. To do this, we develop a continuous measure for crisis probability. The methodology employed distinguishes short- from long-term relationships, enhancing the analysis's depth and fortifying the results for autoregressive processes. The study addresses endogeneity and potential simultaneity between different crises using a sample of 49 developed and emerging countries spanning 1984-2016. The empirical investigation incorporates a simultaneous equation, Bayesian Model Averaging (BMA) approach, a Panel Autoregressive Vector (P-VECM), an Autoregressive Distributed Lag (ARDL) technique, as well as Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) methods. Findings indicate that while all crisis types may stem from unfavorable conditions, there exists a time lag in triggering and duration. Specifically, economic crises tend to be more persistent and are typically preceded by financial crises. Granger-causality test results support a robust bidirectional causality between financial and real difficulties, with the financial sector influencing the real economy more significantly. Moreover, the study reveals that the impact of economic volatility on financial stability is transient and lacks long-term significance. Conversely, the effect of a financial crisis on the real economy is enduring and remains significant in the long run. Additionally, exchange market volatility emerges as a crucial determinant for both financial and economic crises.

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Section: 31discrete Analysissupporting

confidence: 53%

Section: Datamentioning

confidence: 99%

Economic and financial crisis: a causal relationship analysis

MTIRAOUI,

HAMDAOUI,

Aroussi

et al. 2024

Preprint

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show abstract

“…GDP per person is the standard by which economic expansion is measured [ 59 , 60 ]. According to earlier research [ 61 ] stronger economic growth is associated with an increase in carbon emission as well as an increase in pollution of the environment.…”

Section: Methodsmentioning

confidence: 99%

Dose institutional quality influences the relationship between urbanization and CO2 emissions?

Khan,

Chen,

Bibi

et al. 2023

PLoS ONE

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As a result of rapid economic expansion, increased energy use, and urbanization, global warming and climate change have become serious challenges in recent decades. Institutional quality can be the remedy to impede the harmful effect of factors on environmental quality. This study investigates the impact that urbanization and institutional quality on environmental quality in in the Belt and Road Initiative (BRI) countries from 2002 to 2019. By using two step generalized method of moment, the findings shows that urbanization leads to an increase in carbon dioxide emissions and a decline in environmental quality. On the other hand, the square term of urbanization indicates that an increase in urbanization leads to a reduction in emissions at a later stage after reach a certain level. Education, on the other hand, has the reverse impact of increasing carbon emissions; economic growth, foreign direct investment, and government effectiveness all boost carbon emissions. In a similar vein, the interaction between urbanization and the effectiveness of the government is unfavorable, underscoring the transformative role that the effectiveness of the government plays in leading to environmental sustainability. Finally, the findings of this study have considerable policy implication for the sample countries.

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“…Their findings are consistent with previous results that effective government institutions promote growth in developing countries, and vice versa. (Uddin et al, 2020) So that some of the literature above gives us an idea that a good political system can support growth (see HarrodDhomar (Evsey D. Domar, 1947), Hamdoi (Hamdaoui et al, 2022))…”

Section: Literature Review and Hypothesis Development Political Syste...mentioning

confidence: 99%

Macroeconomic Effects on Economic Growth in Muslim Countries: Political System as A Moderating Variable

Arohman,

Qoyum,

Ihsan

et al. 2023

Ekonomika Syariah

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This study seeks to explore the role of the political system in supporting the influence of macro variables on economic growth in the world's Islamic countries. Data obtained from the world bank during 2010-2021. The econometric model used in the research is the Generalized Method of Moments (GMM). The main finding is that the political system has a significant negative effect on growth. This negative effect is caused by the low value of the political index determined by world governance indicators. In addition, foreign direct investment and remittances are still the main variables in supporting economic growth in the Islamic countries of the world. In contrast, interest rates show negative effects on economic growth. Further results show that an ineffective political system is unable to strengthen the relationship between foreign direct investment, remittances, and interest rates on economic growth. These findings serve as an evaluation for the 2025 OIC internal implementation action program.AbstrakStudi ini berusaha untuk mengeksplorasi peran dari sistem politik dalam mendukung pengaruh variabel makro terhadap pertumbuhan ekonomi di negara Islam dunia. Data diperoleh dari world bank selama tahun 2010-2021. Model ekonometrika yang digunakan dalam penelitian ialah generalized method of moments (GMM). Adapun temuan utamanya ialah sistem politik berpengaruh negatif signifikan terhadap pertumbuhan. Efek negatif ini disebabkan dengan rendahnya nilai indeks politik yang ditentukan oleh world governance indicators. Selain itu, investasi asing langsung dan remitansi masih menjadi variabel utama dalam mendukung pertumbuhan ekonomi di negara-negara Islam dunia. Sebaliknya, tingkat suku bunga menunjukkan efek negatif terhadap pertumbuhan ekonomi. Hasil selanjutnya ditunjukkan bahwa sistem politik yang tidak efektif tidak mampu memperkuat hubungan antara investasi asing langsung, remitansi, dan tingkat suku bunga terhadap pertumbuhan ekonomi. Temuan ini menjadi evaluasi untuk program aksi OKI 2025 yang saat ini masih berlangsung.

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Capital Account Liberalization, Political Stability, and Economic Growth

Cited by 21 publications

References 81 publications

Economic and financial crisis: a causal relationship analysis

Economic and financial crisis: a causal relationship analysis

Dose institutional quality influences the relationship between urbanization and CO2 emissions?

Macroeconomic Effects on Economic Growth in Muslim Countries: Political System as A Moderating Variable

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