Hassan B Ghassan
Umm Al-Qura University, Makkah, Saudi Arabia, Economics, Faculty Member
Research Interests:
The paper aims to exhibit the impacts of the international financial crisis on the real economy of Saudi Arabia through economic and financial channels, which connect the Saudi economy to the world economy. Based on the mechanism of... more
The paper aims to exhibit the impacts of the international financial crisis on the real economy of Saudi Arabia through economic and financial channels, which connect the Saudi economy to the world economy. Based on the mechanism of international liquidity and its relationship to the net-exports and GDP, and using database from 1968 to 2009, we estimate SVAR model founded the interpretation of structural shock of the global reserves assets as a shock in the international financial markets, and as a shock in the monetary and financial government policies. The findings indicate that a negative shock of international liquidity i.e. more foreign reserves assets leads in the long-run to real economic growth after its fall back in the short-run. This economic growth could allow increase in net-exports with the probable decrease in the imports. We expect that the simulated negative shocks from the monetary authorities would reduce the saving glut effect in the Saudi economy and transform i...
Research Interests:
The purpose of this paper is to analyze the relationship between investment in public sector institutions and private investment in the Saudi economy by using Structural VAR model for testing the dynamic crowding-out effect during the... more
The purpose of this paper is to analyze the relationship between investment in public sector institutions and private investment in the Saudi economy by using Structural VAR model for testing the dynamic crowding-out effect during the last four decades. Three fundamental variables are mobilized: the GDP, public investment and private investment. The linear relationship between structural shocks, which have an economic and financial interpretation, and the reduced random residuals has been established to evaluate the dynamic impacts. The findings show that the investment of the public sector institutions has an impact on the investment of private sector, and that the impulse response functions to the supply and demand shocks indicate that the crowding-out effect is verified in the short and long run.
Research Interests:
Research Interests:
The purpose of this paper is to analyze the relationship between investment in public sector institutions and private investment in the Saudi economy by using Structural VAR model for testing the dynamic crowding-out effect during the... more
The purpose of this paper is to analyze the relationship between investment in public sector institutions and private investment in the Saudi economy by using Structural VAR model for testing the dynamic crowding-out effect during the last four decades. Three fundamental variables are mobilized: the GDP, public investment and private investment. The linear relationship between structural shocks, which have an economic and financial interpretation, and the reduced random residuals has been established to evaluate the dynamic impacts. The findings show that the investment of the public sector institutions has an impact on the investment of private sector, and that the impulse response functions to the supply and demand shocks indicate that the crowding-out effect is verified in the short and long run
The purpose of this paper is to analyze the relationship between investment in public sector institutions and private investment in the Saudi economy by using Structural VAR model for testing the dynamic crowding-out effect during the... more
The purpose of this paper is to analyze the relationship between investment in public sector institutions and private investment in the Saudi economy by using Structural VAR model for testing the dynamic crowding-out effect during the last four decades. Three fundamental variables are mobilized: the GDP, public investment and private investment. The linear relationship between structural shocks, which have an economic and financial interpretation, and the reduced random residuals has been established to evaluate the dynamic impacts. The findings show that the investment of the public sector institutions has an impact on the investment of private sector, and that the impulse response functions to the supply and demand shocks indicate that the crowding-out effect is verified in the short and long run
Research Interests:
Research Interests:
Research Interests:
Research Interests:
This paper puts forward an analysis of the French dairy industry. We use statistic processing of individual firms data with regards to their economic features and jobs structure. Nine models of firms are brought forward corresponding to... more
This paper puts forward an analysis of the French dairy industry. We use statistic processing of individual firms data with regards to their economic features and jobs structure. Nine models of firms are brought forward corresponding to different forms of organization conducting to the setting into practice of various strategies, as much in the point view of used technologies and fabricated products as in those of market relations. The firms which make up the nine models and the competition/coordination relationships which tied them, allows to build up a whole representation of the dairy industry. To end, we test the relative efficiency of the different models for several economic performance criteria. The tests are concluding to a coherence of each of these models at the heart of a global grading.
Research Interests:
The paper aims to exhibit the impacts of the international financial crisis on the real economy of Saudi Arabia through economic and financial channels, which connect the Saudi economy to the world economy. Based on the mechanism of... more
The paper aims to exhibit the impacts of the international financial crisis on the real economy of Saudi Arabia through economic and financial channels, which connect the Saudi economy to the world economy. Based on the mechanism of international liquidity and its relationship to the net-exports and GDP, and using database from 1968 to 2009, we estimate SVAR model founded the interpretation of structural shock of the global reserves assets as a shock in the international financial markets, and as a shock in the monetary and financial government policies. The findings indicate that a negative shock of international liquidity i.e. more foreign reserves assets leads in the long-run to real economic growth after its fall back in the short-run. This economic growth could allow increase in net-exports with the probable decrease in the imports. We expect that the simulated negative shocks from the monetary authorities would reduce the saving glut effect in the Saudi economy and transform i...
The paper aims to explore the impacts of bi-demographic structure on the current account and growth. Using a SVAR modeling, we track the dynamic impacts between these underlying variables. New insights have been developed about the... more
The paper aims to explore the impacts of bi-demographic structure on the current account and growth. Using a SVAR modeling, we track the dynamic impacts between these underlying variables. New insights have been developed about the dynamic interrelation between population growth, current account and economic growth. The long-run net impact on economic growth of the domestic working population growth and demand labor for emigrants is positive, due to the predominant contribution of skilled emigrant workers. Besides, the positive long-run contribution of emigrant workers to the current account growth largely compensates the negative contribution from the native population, because of the predominance of skilled compared to unskilled workforce. We find that a positive shock in demand labor for emigrant workers leads to an increasing effect on native active age ratio. Thus, the emigrants appear to be more complements than substitutes for native workers.
Research Interests:
The purpose is to compare the perfect Stochastic Return (SR) model like Islamic banks to the Fixed Return (FR) model as in conventional banks by measuring up their impacts at the macroeconomic level. We prove that if the optimal choice of... more
The purpose is to compare the perfect Stochastic Return (SR) model like Islamic banks to the Fixed Return (FR) model as in conventional banks by measuring up their impacts at the macroeconomic level. We prove that if the optimal choice of investor share in SR model α* realizes the indifference of the financial institution toward SR and FR models, there exists α less than α* such that the banks strictly prefers the SR model. Also, there exists α, γ and λ verifying the conditions of α-sharing such that each party in economy can be better under the SR model and the economic welfare could be improved in a Pareto-efficient way.
Research Interests:
The purpose of this paper is to analyze the relationship between investment in public sector institutions and private investment in the Saudi economy by using Structural VAR model for testing the dynamic crowding-out effect during the... more
The purpose of this paper is to analyze the relationship between investment in public sector institutions and private investment in the Saudi economy by using Structural VAR model for testing the dynamic crowding-out effect during the last four decades. Three fundamental variables are mobilized: the GDP, public investment and private investment. The linear relationship between structural shocks, which have an economic and financial interpretation, and the reduced random residuals has been established to evaluate the dynamic impacts. The findings show that the investment of the public sector institutions has an impact on the investment of private sector, and that the impulse response functions to the supply and demand shocks indicate that the crowding-out effect is verified in the short and long run.
Islamic banks are characterized by their compliance to Islamic laws and practices, primarily the prohibition of interest and the trading of loans. During the 2008–2009 financial crisis, when a large number of conventional banks announced... more
Islamic banks are characterized by their compliance to Islamic laws and practices, primarily the prohibition of interest and the trading of loans. During the 2008–2009 financial crisis, when a large number of conventional banks announced bankruptcy, no Islamic bank failures were reported. However, there is no clear consensus in the literature on the question of whether Islamic banks are more or less stable than conventional banks. To shed some light on this issue, we studied a sample of Saudi banks using quarterly data over a period centered on the 2008 financial crisis. Careful analysis of the data suggested first of all that many of the variables typically used in financial stability studies may be non-stationary, a methodological point largely ignored in the literature. Using time-series methods suitable for this type of data, we concluded that individual heterogeneity may matter more than either the conventional or Islamic nature of the banks. Concentrating on the largest banks,...
The work analyses the writings of Shibani, considering their relevance for contemporary Islamic economics. The novelty of Shibani’s earnings model is its integration of Zakat and other social giving in the social welfare function, which... more
The work analyses the writings of Shibani, considering their relevance for contemporary Islamic economics. The novelty of Shibani’s earnings model is its integration of Zakat and other social giving in the social welfare function, which makes the consumer utility a multi-dimensional devotional, material, ethical, social, Shariah-compliant function. The paper proposes a model based on Shibani’s thought, in which the consumer’s income evolves increasingly, from the “imperative earnings” that cover the consumer’s basic needs, to “recommended earnings”, which cover the basic needs of relatives; and to “permissible earnings”, which cover the poor’s needs. Accordingly, the model distinguishes about imperative, recommended, and permissible utility. Rich consumers draw additional utility from Zakat spending in favour of poor consumers. The permissible marginal utility is related to faith interaction and enhances social utility as social transfers are paid to the poor and needy groups. JEL: ...
Research Interests:
Islamic faith and the ethical dimensions of the individual and the community have a significant role in guiding economic behavior by connecting the worldly life to the hereafter. In the Islamic economics paradigm, by relating ethics to... more
Islamic faith and the ethical dimensions of the individual and the community have a significant role in guiding economic behavior by connecting the worldly life to the hereafter. In the Islamic economics paradigm, by relating ethics to the economic behavior of spending, we exhibit the good (bad) attributes of ethical (unethical) behavior. In this paper, we contribute to developing a measure of the overspending and underspending that allows testing the presence of wastefulness and niggardliness.
Research Interests:
This paper investigates the long-run relationship between the real private investment and the government investment in Saudi Arabia using a threshold cointegration test. The results show the stability of the private investment effect both... more
This paper investigates the long-run relationship between the real private investment and the government investment in Saudi Arabia using a threshold cointegration test. The results show the stability of the private investment effect both above the threshold and mostly below the threshold. As if the negative discrepancies disappear more quickly than those positive which remain non-permanent. This finding reveals the strength of the Saudi Arabia economy in response to exogenous shocks and especially the negative ones.
Research Interests:
This paper aims to study the relationship between the Government Spending and the private investment in non-oil sectors of Saudi economy through the crowding-out effect during the last four decades. We use the Box-Cox transformation as a... more
This paper aims to study the relationship between the Government Spending and the private investment in non-oil sectors of Saudi economy through the crowding-out effect during the last four decades. We use the Box-Cox transformation as a specification and the tests of cointegration and causality and the recursive maximum likelihood test. The findings exhibit that the crowding-out effect is verified in Saudi Arabia economy through the investment spending of the government institutions vis-a-vis the institutions of the private sector, meanwhile the results show that the government infrastructure spending supports the increase of the private investments.
This paper analyses the current account in the intertemporal model framework. Based on Obstfeld and Rogoff’s book (1996), we aim to model the ratio of the current account to GDP explicitly in the long run. Also, we criticize the... more
This paper analyses the current account in the intertemporal model framework. Based on Obstfeld and Rogoff’s book (1996), we aim to model the ratio of the current account to GDP explicitly in the long run. Also, we criticize the tautological approach in the paper of Cerrato et al. (2014) which supposes a strong hypothesis that the output growth is the sum of the population growth and the per-capita GDP growth. This hypothesis leads to the identical equation of the ratio current account to GDP expressed by level or per capita. In this paper, we consider the overlapping generations to determine precisely the equation of the per-capita current account using the relevant variables. Then, this model appears more interesting and testable. It allows to verify the validity of the intertemporal model of the current account through the semi-elasticity of the ratio of per-capita current account to the per-capita GDP to the per-capita GDP growth or the per-capita consumption growth.
Research Interests:
The paper aims to explore the impacts of bi-demographic structure on the current account and growth. We use a Structural VAR modeling to track the dynamic impacts between the underlying variables of Saudi economy. New insights are... more
The paper aims to explore the impacts of bi-demographic structure on the current account and growth. We use a Structural VAR modeling to track the dynamic impacts between the underlying variables of Saudi economy. New insights are developed in studying the relation between population growth, current account and economic growth inside the neoclassical theory of population. The long-run net impact on economic growth of the bi-source of population growth is negative due to lower skills of the immigrant labor endowment. This empirical outcome also confirmed in some previous papers. Besides, the negative long-run contribution of immigrant workers to the current account growth largely exceeds that of the native population because of the increasing levels of remittance outflows. We find that a positive shock in the migration flows leads to a negative impact on native active age ratio. Thus, the immigrants appear to be more substitutes than complements for native workers.
Research Interests:
The paper aims to model the outliers of the importation equations by using recursive robust estimation methods. Firstly, we use the test of Belsley to detect the aberrant points in the Moroccan importation data such agricultural... more
The paper aims to model the outliers of the importation equations by using recursive robust estimation methods. Firstly, we use the test of Belsley to detect the aberrant points in the Moroccan importation data such agricultural machinery, sea boats, electric generators, motors-generators. We use robust method to estimate long-run and short-run equations of imports via many robustness functions. The findings exhibit interesting elasticities to price and to revenue and show the adjustment rate of each type of imported products.
Research Interests: Engineering and Economics
To analyze the consumer utility, we use Shibani’s model that is based on three successive layers of earning/spending/utility. Based on the social solidarity, we show that the marginal earning depends on the first difference between the... more
To analyze the consumer utility, we use Shibani’s model that is based on three successive layers of earning/spending/utility. Based on the social solidarity, we show that the marginal earning depends on the first difference between the MPC of lower and upper social groups. According to the social welfare function, the permissible marginal utility is related to the faith interaction driving to an efficient transfer of purchasing capabilities to the targeted group. The optimal faithful behavior of wealthy group leads to an elasticity of marginal utility less than one. Besides, the belief holding produces hidden supports to the affluent consumer.
Research Interests:
This paper analyses the current account in the present value model (PVMCA) framework. Based on Obstfeld and Rogoff’s book (1996), we aim to model the current account (CA) to GDP ratio in the long run. Since there is scarce theory-based... more
This paper analyses the current account in the present value model (PVMCA) framework. Based on Obstfeld and Rogoff’s book (1996), we aim to model the current account (CA) to GDP ratio in the long run. Since there is scarce theory-based empirical modeling, this paper provides evidence for main determinants of the current account. Firstly, we criticize the tautological approach in the paper of Cerrato et al. (2014) when they use a simple relation between the output growth and the per capita GDP growth. This relation leads to identical equations of aggregate and per capita CA-to-GDP ratio. Secondly, we consider the overlapping generations to determine the equation of per-capita CA using relevant variables. This model appears more interesting and testable. It allows to verify empirically the validity of the PVMCA through the quasi-elasticity of CA-to-GDP with respect to the per capita growth rate of output and consumption.
Research Interests:
The aim of the paper is to test the Marshall-Lerner-Robinson condition by using the unit-root test of Ng-Perron (2001) and cointegration test of Perron-Rodriguez (2001). These tests are based on procedures for removing the trend using the... more
The aim of the paper is to test the Marshall-Lerner-Robinson condition by using the unit-root test of Ng-Perron (2001) and cointegration test of Perron-Rodriguez (2001). These tests are based on procedures for removing the trend using the GLS, leading to remove no-stochastic components. By examining the existence of LR relationship between the exchange rate and net-exports using the Moroccan quarterly data, it appears that there is no complementary relationship between the two variables. The rigidity of nominal and real behaviors of both private and public sectors explains to some extent the absence of a long-run equilibrium in the temporal evolution of the exchange rate. These discrepancies related in particular to markets mechanism and economic policies of the government.
Research Interests:
This paper puts forward an analysis of the French dairy industry. We use statistic processing of individual firms data with regards to their economic features and jobs structure. Nine models of firms are brought forward corresponding to... more
This paper puts forward an analysis of the French dairy industry. We use statistic processing of individual firms data with regards to their economic features and jobs structure. Nine models of firms are brought forward corresponding to different forms of organization conducting to the setting into practice of various strategies, as much in the point view of used technologies and fabricated products as in those of market relations. The firms which make up the nine models and the competition/coordination relationships which tied them, allows to build up a whole representation of the dairy industry. To end, we test the relative efficiency of the different models for several economic performance criteria. The tests are concluding to a coherence of each of these models at the heart of a global grading.
Research Interests: Business and Engineering
The paper aims to examine the relationship, whether complementary or substitutive, between inward FDI and gross domestic investment in the six GCC countries using cointegration techniques and fully modified GMM estimation. Based on the... more
The paper aims to examine the relationship, whether complementary or substitutive, between inward FDI and gross domestic investment in the six GCC countries using cointegration techniques and fully modified GMM estimation. Based on the panel data, the empirical evidence implies that in Qatar, Oman, the UAE and Saudi Arabia, the inward FDI has positive short-run and long-run effects on the domestic investment. For Bahrain, such a complementary relationship exists only in the short-run. For the majority of GCC countries, the long-run elasticities have large magnitude compared to the short-run counterparts, justifying more attraction policy of the IFDI in the future. The gap in the privatization process of public enterprises in the GCC explains in a large extent their heterogeneity in terms of elasticities and spillovers effects.
Research Interests:
If the z-score index is widely used as a measure of the stability in conventional banks, it would be more reliable to find an appropriate measure of the stability for all type of banks. Knowing that the cooperative or Islamic banks follow... more
If the z-score index is widely used as a measure of the stability in conventional banks, it would be more reliable to find an appropriate measure of the stability for all type of banks. Knowing that the cooperative or Islamic banks follow different contracts forms of investments such the PLS system and are closer to real economic, by considering the illiquid assets, we expect that the new measure labelled g-score, associated to tangible economic growth, reflects multiple risks and allows to track the banking stability.
Research Interests:
Main papers on Zakat are focused on Shariah explanation to prove its important role to resolve social and economic problems of Islamic society. This paper aims to model the Zakat system to determine the volume and the effects of Zakat... more
Main papers on Zakat are focused on Shariah explanation to prove its important role to resolve social and economic problems of Islamic society. This paper aims to model the Zakat system to determine the volume and the effects of Zakat funds. We expect that this is the first empirical paper, using a large database covering all economic activities, leading to estimate the financial required rights to the poor and needy people and others inside the Moroccan society.
Research Interests:
The research aims to examine the relationship, whether complementary or substitutive, between inward FDI and gross domestic investment in the six GCC countries using cointegration techniques and fully modified GMM estimation. Based on the... more
The research aims to examine the relationship, whether complementary or substitutive, between inward FDI and gross domestic investment in the six GCC countries using cointegration techniques and fully modified GMM estimation. Based on the panel data during the period 1979-2010, the empirical evidence implies that in Qatar, Oman, the UAE and Saudi Arabia, the inward FDI has positive short-run and long-run effects on the domestic investment. For Bahrain, such a complementary relationship exists only in the short-run. For the majority of GCC countries, the long-run elasticities have large magnitude compared to the short-run counterparts, justifying more attraction policy of the IFDI in the future. The gap in the privatization process of public enterprises in the GCC explains in a large extent their heterogeneity in terms of elasticities and spillovers effects.
Research Interests:
Earlier, the Muslim scholars stated that money is a social convention. For instance, Ibn Taymiyyah (1263-1328) indicated that the gold standard money constitutes a pricing system or a rationale money. Ibn Khaldun (1377) urged a stable... more
Earlier, the Muslim scholars stated that money is a social convention. For instance, Ibn Taymiyyah (1263-1328) indicated that the gold standard money constitutes a pricing system or a rationale money. Ibn Khaldun (1377) urged a stable monetary policy by using Shariah currency which is related to the number of transactions, and the monetary policy was done through a control and a supervision by a Shariah board office as a monetary authority. The focus point in all transactions is to forbid the Riba including the banking interest rate. Inside the Shariah paradigm and according to historical economic facts revealed by Ibn Khaldun, we suggest that the economic theory of money, through the equation of exchange, should be re-examined by treating the value of transactions and the velocity of money as endogenous, and considering the stock of money as exogenous and determined only by the monetary authority. We expect that when the consumers and producers as buyers and sellers behave followin...
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The paper aims to use the Granger causality to deduce the structure of recursive model. Manipulating data from five sectors of Moroccan economy we form causal chain between endogenous variables to build a recursive system. The findings... more
The paper aims to use the Granger causality to deduce the structure of recursive model. Manipulating data from five sectors of Moroccan economy we form causal chain between endogenous variables to build a recursive system. The findings exhibit two group, the first one consists of agriculture, agro-industry and manufacturing sectors where the investment effort determines the balance trade and influences the cash-flow level. Meanwhile, in the second group formed by energy and mines sectors, the balance trade determines the investment effort and influences the cash-flow. The Granger causality justifies the modeling of the system. But, we cannot avoid ex-post the causality and exogeneity tests for the predetermined endogenous variables as Hausman and Holly tests. There tests are running once the model is estimated.
Research Interests:
Capital market liberalization allows the access of foreign investors to Saudi stock market especially since 2005. The test of adaptation to the market volatility exhibits the existence of the volatility clustering in the daily return and... more
Capital market liberalization allows the access of foreign investors to Saudi stock market especially since 2005. The test of adaptation to the market volatility exhibits the existence of the volatility clustering in the daily return and volume of traded shares. This finding is corroborated by the absence of variance homoscedasticity using BF test. Also, the results indicate that the period between 11.2002 and 01.2006 is more efficient comparatively to other periods. Furthermore, from the start of 2010, there is a relative stability in stock market. The shocks on volatility market are persistent, but their intensity and permanence after the initial liberalization and institutional reforms of the capital market appear to be less in the volume, but more expanded in the prices.
Research Interests:
The purpose of this paper is to test the mechanism of automatic stabilization between the dynamics of real GDP-growth and budget deficit by using structural VAR methodology with quarterly macroeconomic data of Moroccan economy. The SVAR... more
The purpose of this paper is to test the mechanism of automatic stabilization between the dynamics of real GDP-growth and budget deficit by using structural VAR methodology with quarterly macroeconomic data of Moroccan economy. The SVAR model allows us to test and evaluate the extent of those mechanisms. It exhibits also the conjunctural and structural components of budget deficit. From a methodological point of view, we avoid to impose long run constraints to adopt simple and efficient approach linking the short-term parameters. The empirical results show that the mechanisms of automatic stabilizing are checked in our sample. The historical decomposition permits us to determine the orientation of budget policy. This decomposition shows that since the finance crisis in 1983 the government respects in tendency a budgetary rule in the sense that the observed balance reflects automatic stabilization measures both of transitory and permanent nature.
Research Interests:
To analyze the consumer utility, we use Shibani’s model that is based on three successive layers of earning/spending/utility. Based on the social solidarity, we show that the marginal earning depends on the first difference between the... more
To analyze the consumer utility, we use Shibani’s model that is based on three successive layers of earning/spending/utility. Based on the social solidarity, we show that the marginal earning depends on the first difference between the MPC of lower and upper social groups. According to the social welfare function, the permissible marginal utility is related to the faith interaction driving to an efficient transfer of purchasing capabilities to the targeted group. The optimal faithful behavior of wealthy group leads to an elasticity of marginal utility less than one. Besides, the belief holding produces hidden supports to the affluent consumer.
The purpose of this research is to test and evaluate the crowding-out effect of the investment expenditure in public sector on the investment effort by private sector by using data from Moroccan Economy. After the theoretical background... more
The purpose of this research is to test and evaluate the crowding-out effect of the investment expenditure in public sector on the investment effort by private sector by using data from Moroccan Economy. After the theoretical background of crowding-out effects in many domains of investment, we introduce the interests variables which express the budget policy of a government and monetary policy of the central bank, and shows the global effective demand addressed to economy. This requires the improvement of a likelihood private investment model and the specification of its shape from a Box-Cox transformation by using the weight average test LM. It has become clear that in the long run term the push effect dominates the crowding-out effect and this leads to a little increase in the elasticity of private investment reaches 0.06%. We have used the bootstrapping methodology to check the signs and the values of crowding-out parameters. Among the main causes which explain this small effect ...
Research Interests:
The results of return equation exhibit the existence of a positive relationship between return and risk, which indicates the high risk and explains the dynamics of shareholders behavior, especially on Saturday and Tuesday, where utmost... more
The results of return equation exhibit the existence of a positive relationship between return and risk, which indicates the high risk and explains the dynamics of shareholders behavior, especially on Saturday and Tuesday, where utmost important information is excreted. The findings highlight that the period of openness to domestic and foreign capital is characterized by more important flow of information. Also the share prices have a memory, especially in the first sub-period, while during the second sub-period this memory is weaker. Furthermore, it is proved that the access of foreign investors could reduce the return volatility of TASI. From the EGARCH-M models, it is reflected through the leverage effect that negative shocks increase the volatility more than positive shocks. The CGARCH-M results show through the volatility persistence rate and decay rate that short-run volatilities perpetuates less than long-run volatilities. It turns out that the liberalization to foreign inves...
This research aims to study the nature of the relationship between the government spending and the private investment in the non-oil sectors of the Saudi economy through testing the crowding out effect during four decades and using the... more
This research aims to study the nature of the relationship between the government spending and the private investment in the non-oil sectors of the Saudi economy through testing the crowding out effect during four decades and using the Bootstrapping technique. Firstly we use the Box-Cox transformation to obtain a best model and we use also the test of cointegration, the causality test and the maximum likelihood estimation. The findings indicate that there is some evidence of the crowding out effect of the investment spending of the public enterprises on the private investment. Meanwhile, government spending on infrastructure is a catalyst to increase the level of private investment. We turn out also that the crowding in effect exceeds the crowding out effect. For the robustness of our results, we implement bootstrapping, which confirm the obtained results through linking the LR statistics to our main sample.
Research Interests:
The novelty of Shibani’s earning model is its integration of Zakat and other social giving in the social welfare function, which makes the consumer utility a multi-dimensional devotional, material, ethical, social, Shariah-compliant... more
The novelty of Shibani’s earning model is its integration of Zakat and other social giving in the social welfare function, which makes the consumer utility a multi-dimensional devotional, material, ethical, social, Shariah-compliant function. In the model, the consumer’s income evolves increasingly from imperative earning that covers consumer’s basic needs, to recommended earning that covers basic needs of relatives; and to permissible earning that covers the poor’s needs. Accordingly, the model has imperative, recommended, and permissible utility. The rich consumer draws additional utility from Zakat spending in favor of the poor consumers. Based on the social solidarity, we show that the marginal earning depends on the first difference between the MPC of lower and upper social groups. The permissible marginal utility is related to the faith interaction and enhances the social utility as social transfer is paid to poor and needy groups.
Research Interests:
This paper aims to study the relationship between the Government Spending and the private investment in non-oil sectors of Saudi economy through the crowding-out effect during the last four decades. We use the Box-Cox transformation as a... more
This paper aims to study the relationship between the Government Spending and the private investment in non-oil sectors of Saudi economy through the crowding-out effect during the last four decades. We use the Box-Cox transformation as a specification and the tests of cointegration and causality and the recursive maximum likelihood test. The findings exhibit that the crowding-out effect is verified in Saudi Arabia economy through the investment spending of the government institutions vis-a-vis the institutions of the private sector, meanwhile the results show that the government infrastructure spending supports the increase of the private investments.
Research Interests:
In order to model the inflation dynamics, we investigated various combinations of nominal rigidities. For this purpose, we analyze two adjustment-of-prices hypotheses as in the new Keynesian literature, namely the price stickiness and the... more
In order to model the inflation dynamics, we investigated various combinations of nominal rigidities. For this purpose, we analyze two adjustment-of-prices hypotheses as in the new Keynesian literature, namely the price stickiness and the sticky information, within a Dynamic Stochastic General Equilibrium (DSGE) model. For each model, we compare the responses of inflation and output to shocks. We found that sticky information modeling correctly reproduces some important stylized facts after monetary shocks, but with hump-shaped responses. The sticky price model, considering that some fixed prices lead to that Phillips curve, does not correctly reproduce the dynamic inflation response to monetary shocks. We show that single indexation does not add persistence to the two specifications, and the choice of rigidity structure appears to be more important than the presence or absence of lagged values of inflation in the dynamics.
Research Interests:
The purpose is to compare the perfect Stochastic Return (SR) model like Islamic banks to the Fixed Return (FR) model as in conventional banks by measuring up their impacts at the macroeconomic level. We prove that if the optimal choice of... more
The purpose is to compare the perfect Stochastic Return (SR) model like Islamic banks to the Fixed Return (FR) model as in conventional banks by measuring up their impacts at the macroeconomic level. We prove that if the optimal choice of share’s investor in SR model α* realize the indifference of the financial institution toward SR and FR models, there exists α
Research Interests:
Islamic faith and the ethical dimensions of the individual and the community play a significant role in guiding economic behavior by connecting the worldly life to the hereafter. The Shariah-compliant faith and ethical values generate... more
Islamic faith and the ethical dimensions of the individual and the community play a significant role in guiding economic behavior by connecting the worldly life to the hereafter. The Shariah-compliant faith and ethical values generate specific behavior that requires Halal earning, fairness in spending and Halal utility leading to materialistic satisfaction and metaphysic reward. To analyze the Muslim consumer utility, in addition to the Islamic economics heritage, we rely on the instruments and prevailing assumptions in economics. Shaibani’s (750-805 AD) analysis of earning/spending/utility is based on three successive layers of earning/spending/utility; namely, the imperative, recommended, and the permissible. In this paper, we firstly contribute to developing a measure of the overspending and underspending. Secondly, based on the social solidarity, we show that the marginal earning has an effect on the macro MPC and depends mostly on the first differences between the MPC of the lo...
Research Interests:
This paper analyses the current account in the intertemporal model framework. Based on Obstfeld and Rogoff’s book (1996), we aim to model the ratio of the current account to GDP explicitly in the long run. Also, we criticize the... more
This paper analyses the current account in the intertemporal model framework. Based on Obstfeld and Rogoff’s book (1996), we aim to model the ratio of the current account to GDP explicitly in the long run. Also, we criticize the tautological approach in the paper of Cerrato et al. (2014) which supposes a strong hypothesis that the output growth is the sum of the population growth and the per-capita GDP growth. This hypothesis leads to the identical equation of the ratio current account to GDP expressed by level or per capita. In this paper, we consider the overlapping generations to determine precisely the equation of the per-capita current account using the relevant variables. Then, this model appears more interesting and testable. It allows to verify the validity of the intertemporal model of the current account through the semi-elasticity of the ratio of per-capita current account to the per-capita GDP to the per-capita GDP growth or the per-capita consumption growth.
Historically, money is gold and silver, supplied by the market on profit criterion. Everywhere, government inconvertible paper money arose from bankruptcy. A government with balanced budgets would never need it. Imposed by force,... more
Historically, money is gold and silver, supplied by the market on profit criterion. Everywhere, government inconvertible paper money arose from bankruptcy. A government with balanced budgets would never need it. Imposed by force, inconvertible paper is a taxation mean, highly inflationary, and causes impoverishment. Unjust and bankrupt governments will continue to force this despotic money. Islamic Monetary Economics refutes the idea of money as a policy tool. Fully convertible paper is Shariah compliant. Shariah requires a just government to balance its budgets and restore fully gold and silver as lawful money.
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This paper investigates the long-run equilibrium relationship between the real private and public investment in Saudi Arabia by using ARDL cointegration tests. The finding shows the stable long-run relation between private investment and... more
This paper investigates the long-run equilibrium relationship between the real private and public investment in Saudi Arabia by using ARDL cointegration tests. The finding shows the stable long-run relation between private investment and public investment. The results indicate that the disequilibrium is largely corrected and converges back to the equilibrium in one year and four months, with a speed of adjustment at rate of about 75 per cent a year.This result supports that the Saudi economy is resilient against the shocks.
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The paper aims to explore the impacts of bi-demographic structure on the current account and growth. Using a SVAR modeling, we track the dynamic impacts between these underlying variables. New insights have been developed about the... more
The paper aims to explore the impacts of bi-demographic structure on the current account and growth. Using a SVAR modeling, we track the dynamic impacts between these underlying variables. New insights have been developed about the dynamic interrelation between population growth, current account and economic growth. The long-run net impact on economic growth of the domestic working population growth and demand labor for emigrants is positive, due to the predominant contribution of skilled emigrant workers. Besides, the positive long-run contribution of emigrant workers to the current account growth largely compensates the negative contribution from the native population, because of the predominance of skilled compared to unskilled workforce. We find that a positive shock in demand labor for emigrant workers leads to an increasing effect on native active age ratio. Thus, the emigrants appear to be more complements than substitutes for native workers.
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This paper explores the long-run current account to GDP ratio in the present value model framework (PVMCA). Firstly, we use Euler equation at macro level to identify a general equation of the per capita current account to GDP. Secondly,... more
This paper explores the long-run current account to GDP ratio in the present value model framework (PVMCA). Firstly, we use Euler equation at macro level to identify a general equation of the per capita current account to GDP. Secondly, through the overlapping generations model we determine the equation of per-capita CA using relevant variables, and discuss the empirical validity of the PVMCA via the quasi-elasticity of CA-to-GDP with respect to the per capita growth rate of output and consumption. We show that the elasticities of CA-to-GDP to per-capita output and ant to per-capita consumption growths interact in opposite paths, meaning that a higher growth rate of consumption tomorrow involves more saving yesterday and brings up a positive current account balance.
We expect in the next special issue of “Theoretical and Empirical Islamic Economics†to attract more papers that could cover a large spectrum of the topics by focusing on the modeling. It appears that the Islamic economics modeling is... more
We expect in the next special issue of “Theoretical and Empirical Islamic Economics†to attract more papers that could cover a large spectrum of the topics by focusing on the modeling. It appears that the Islamic economics modeling is not sufficiently forged and needs some specified research programs to develop robust theories based on the Islamic paradigm. The current issue covers two very interesting subjects: Islamic economics theory of consumer behavior (Ghassan paper) and theoretical perspective measure of the Islamic monetary policy (Hasan paper). By combining faith and ethics of the Muslim consumer behavior, the contribution of the first paper consists to suggest a measure of overspending and underspending, and explains that the spending is Shariah-compliant if it falls between the two tails of the spending. Based on the credit multiplier mechanism, the second paper suggests a new measure of the leverage control rate that could leads to an efficient monetary policy to cont...
The financial crises are considered the major challenges facing the prosperity and stability of the banking system and menace its stability. Several studies on the financial and banking sector have demonstrated that Islamic banks have... more
The financial crises are considered the major challenges facing the prosperity and stability of the banking system and menace its stability. Several studies on the financial and banking sector have demonstrated that Islamic banks have shown more financial robustness and stability compared to conventional banks, over periods of financial crises. This research aims to measure the stability extent of the Saudi Arabia banks including Islamic banks and conventional banks using quarterly data from 2005 to 2011. This period is characterized by the global financial crisis shocks (2007-2008). The sample used is composed of six banks including two Islamic banks (AlRajhi Bank and AlBilad Bank) and four traditional banks (Riyad Bank, Saudi Investment Bank, Saudi British Bank and Saudi American Bank). This sample represents an important part of 64% of the Saudi banking sector and covers close to two-thirds of banks whose shares are traded on the Saudi stock market. The research focuses on three ...
This paper investigates the long-run equilibrium relationship between the real private and total public investment disaggregated into government and public enterprises investment in Saudi Arabia by using the weak exogeneity and ARDL... more
This paper investigates the long-run equilibrium relationship between the real private and total public investment disaggregated into government and public enterprises investment in Saudi Arabia by using the weak exogeneity and ARDL cointegration tests after using Engle-Granger and Perron-Rodriguez cointegration tests. The results show the stable long-run relation between private and total public investment. The public investment crowds out the private investment, while this latter is crowding in by infrastructure government investment. The absence of financial accelerator mechanism indicates that the private enterprises could be in vicious loan-credit cycle. The finding indicate that long-run exceeds short-run crowding-out, since the public sector still dominates the economic activities and attracts more capital resources. But the disequilibrium of private investment is widely corrected and converges back, with a high speed of adjustment, to its long-run equilibrium.
Research Interests: Investment and Capacity
The purpose of this paper is to estimate a structural VAR model using macroeconomic data of Moroccan Economy, which includes national saving rate and budget deficit rate, to test the Ricardian Equivalence hypothesis. In this framework we... more
The purpose of this paper is to estimate a structural VAR model using macroeconomic data of Moroccan Economy, which includes national saving rate and budget deficit rate, to test the Ricardian Equivalence hypothesis. In this framework we separate saving and deficit movements into two types of shocks, associated with structural parameters, as we looking for two needles in haystack. We avoid to impose short run or long run constraints, which represents a methodological contribution and permits to obtain a best estimation of structural multipliers. The empirical results show that the mechanism of automatic stabilizing are indirectly checked in our sample. Our results suggest that Ricardian Equivalence did work in our sample, since private saving compensated a big fraction 90 per cent of the shock in budget deficit. This supports the interpretation that the large budget deficits, financed especially by debt, have been a very important factor behind the significant increase in real inter...
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This paper investigates the long-run equilibrium relationship between the real net exports and the exchange rate in Moroccan economy by the threshold cointegration test. This approach, introduced by Enders and Siklos (2001), provides... more
This paper investigates the long-run equilibrium relationship between the real net exports and the exchange rate in Moroccan economy by the threshold cointegration test. This approach, introduced by Enders and Siklos (2001), provides clair evidence of the cointegration relationship characterized by an asymmetric adjustment. By allowing for this asymmetry, we obtain the results showing the stability of the Marshall-Lerner-Robinson (MLR) condition. In particular, the estimated results indicate the the adjustment process is persistent toward equilibrium above an appropriately threshold parameter, whereas the adjustment process toward equilibrium quickly converges below the estimated threshold. This finding indicates that the deviations from equilibrium resulting from increases in real effective exchange rate (i.e. devaluation) are highly persistent, but the deviations from equilibrium resulting from decreases in real effective exchange rate (i.e. reevaluation) converge quickly toward e...
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This paper estimates the smoothed-GDP of Moroccan economy since 1958. We use advanced techniques, as in the public and private international organizations, such the Hodrick-smoothing Presscott and Beveridge-Nelson decomposition. The... more
This paper estimates the smoothed-GDP of Moroccan economy since 1958. We use advanced techniques, as in the public and private international organizations, such the Hodrick-smoothing Presscott and Beveridge-Nelson decomposition. The results identified and quantified, in addition to an economic, monetary and fiscal reading-grids greatly expanded around six business cycles. These cycles show significant effects of the government policy and the climate hazards. This latter seems to amplify the extent of the cycles. The GDP-Cycles, apart the agricultural sector, appear to be relatively more sensitive to the economic conjuncture and the international environment especially of the main partners.
Purpose This paper aims to measure the stability extent of the banking sector in Saudi Arabia, including Islamic and conventional banks (CBs), using quarterly data. Design/methodology/approach The paper uses seemingly unrelated... more
Purpose This paper aims to measure the stability extent of the banking sector in Saudi Arabia, including Islamic and conventional banks (CBs), using quarterly data. Design/methodology/approach The paper uses seemingly unrelated regressions to estimate the determinants of the z-score. Findings The panel data model shows that Islamic banks (IBs) reduce the financial stability index relatively; meanwhile, they contribute efficiently to enhance the financial stability through the diversification of their assets. The Saudi banking sector exhibits strong concentration affecting the financial stability negatively. Research limitations/implications The paper’s topic can be extended to cover the recent period. Practical implications The limited presence of IBs in the Saudi banking sector jeopardizes any effort to improve the financial stability. Social implications By attracting more clients, IBs would contribute more to the financial stability in the Saudi economy. Also, the monetary author...
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The results of return equation exhibit the existence of a positive relationship between return and risk, which indicates the high risk and explains the dynamics of shareholders behavior, especially on Saturday and Tuesday, where utmost... more
The results of return equation exhibit the existence of a positive relationship between return and risk, which indicates the high risk and explains the dynamics of shareholders behavior, especially on Saturday and Tuesday, where utmost important information is excreted. The findings highlight that the period of openness to domestic and foreign capital is characterized by more important flow of information. Also the share prices have a memory, especially in the first sub-period, while during the second sub-period this memory is weaker. Furthermore, it is proved that the access of foreign investors could reduce the return volatility of TASI. From the EGARCH-M models, it is reflected through the leverage effect that negative shocks increase the volatility more than positive shocks. The CGARCH-M results show through the volatility persistence rate and decay rate that short-run volatilities perpetuates less than long-run volatilities. It turns out that the liberalization to foreign inves...
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Using a new panel cointegration test that considers serial correlation and cross-section dependence on a mixed and heterogenous sample of Saudi banks, we revisit the cointegrating equation of the z-score index of banking stability. Our... more
Using a new panel cointegration test that considers serial correlation and cross-section dependence on a mixed and heterogenous sample of Saudi banks, we revisit the cointegrating equation of the z-score index of banking stability. Our results show that even when we consider the cross-section dependency and serial correlation of the errors, there is a possibility of a long-run relationship, which holds in our sample of banks. Furthermore, in the medium term, we found some banks to be integrated, whereas others were non-cointegrated. We interpret this to suggest that some banks contribute to banking stability, whereas others do not. In other words, there exists at least one bank that acts as a destabilizer and the challenge for financial regulators is to identify which banks these are. However, the current version of the Hadri et al. test does not allow for the identification of the non-cointegrated banks. If the test was able to do that, the regulatory authorities would be able to d...
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JEL classification: G21 G28 C12 Islamic banks are characterized by their compliance to Islamic laws and practices, primarily the prohibition of interest and the trading of loans. During the 2008-2009 financial crisis, when a large number... more
JEL classification: G21 G28 C12 Islamic banks are characterized by their compliance to Islamic laws and practices, primarily the prohibition of interest and the trading of loans. During the 2008-2009 financial crisis, when a large number of conventional banks announced bankruptcy, no Islamic bank failures were reported. However, there is no clear consensus in the literature on the question of whether Islamic banks are more or less stable than conventional banks. To shed some light on this issue, we studied a sample of Saudi banks using quarterly data over a period centered on the 2008 financial crisis. Careful analysis of the data suggested first of all that many of the variables typically used in financial stability studies may be non-stationary, a methodological point largely ignored in the literature. Using time series methods suitable for this type of data, we concluded that individual heterogeneity may matter more than either the conventional or Islamic nature of the banks. Concentrating on the largest banks, we find the Islamic banks contribute positively to the stability of the system.
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ABSTRACT
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ABSTRACT
ABSTRACT
ABSTRACT Résumé Ce papier présente une estimation du produit intérieur brut tendanciel marocain depuis 1958. Nous utilisons des techniques avancées, utilisées également par les organismes internationaux publics et privés, comme le lissage... more
ABSTRACT Résumé Ce papier présente une estimation du produit intérieur brut tendanciel marocain depuis 1958. Nous utilisons des techniques avancées, utilisées également par les organismes internationaux publics et privés, comme le lissage Hodrick-Presscott et la décomposition de Beveridge-Nelson. Cette estimation a permis d'identifier et de quantifier, via une grille de lecture très étoffée sur les principales variables économiques, monétaires et budgétaires, six cycles conjoncturels. Ces différents cycles montrent les effets marquants du rôle du gouvernement et de l'aléa climatique. Ce dernier semble amplifier l'étendu des cycles. Les cycles du produit intérieur brut hors agriculture semblent relativement plus sensibles à la conjoncture et à l'environnement international surtout de nos principaux partenaires. Abstract This paper estimates the smoothed-GDP of Moroccan economy since 1958. We use advanced techniques, as in the public and private international organizations, such the Hodrick-smoothing Presscott and Beveridge-Nelson decomposition. The results identified and quantified, in addition to an economic, monetary and fiscal reading-grids greatly expanded around six business cycles. These cycles show significant effects of the government policy and the climate hazards. This latter seems to amplify the extent of the cycles. The GDP-Cycles, apart the agricultural sector, appear to be relatively more sensitive to the economic conjuncture and the international environment especially of the main partners.
Research Interests: Investment and Capacity
Research Interests: Investment and Capacity
ABSTRACT
ABSTRACT
ABSTRACT
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ABSTRACT
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The purpose of this paper is to test the Ricardian Equivalence Hypothesis REH by estimating a SVAR model. In this framework, we separate the co-movements of saving rate and budget deficit rate into two shocks, associated with structural... more
The purpose of this paper is to test the Ricardian Equivalence Hypothesis REH by estimating a SVAR model. In this framework, we separate the co-movements of saving rate and budget deficit rate into two shocks, associated with structural parameters, as if we were looking for ‘‘two needles in haystack’’. We avoid imposing formal short and long run constraints, because these
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Indicateurs économiques et financiers : positionnement de l'économie marocaine par rapport à 10 pays Dans le but d'avoir une vision globale de la compétitivité de l'économie marocaine, il nous a semblé nécessaire de ne pas se... more
Indicateurs économiques et financiers : positionnement de l'économie marocaine par rapport à 10 pays Dans le but d'avoir une vision globale de la compétitivité de l'économie marocaine, il nous a semblé nécessaire de ne pas se limiter à analyser la compétitivité à l'exportation, mais à élargir ce concept afin d'appréhender les facteurs qui sont derrière cette variable de résultat. Cette approche globale ne peut se faire qu'à travers le positionnement de l'économie marocaine par rapport à un échantillon choisi de pays concurrents et partenaires. Dans un contexte de mondialisation de l'économie, les opérateurs économiques privés et publics ne focalisent plus leur attention uniquement sur les indicateurs des finances publiques, mais sur plusieurs indicateurs socio-économiques. L'objet de la présente note est de positionner le Maroc suivant plusieurs indicateurs et par rapport à un échantillon de pays sur la moyenne de la période 1989-1994. Les données...
The paper aims to model the outliers of the importation equations by using recursive robust estimation methods. Firstly, we use the test of Belsley to detect the aberrant points in the Moroccan importation data such agricultural... more
The paper aims to model the outliers of the importation equations by using recursive robust estimation methods. Firstly, we use the test of Belsley to detect the aberrant points in the Moroccan importation data such agricultural machinery, sea boats, electric generators, motors-generators. We use robust method to estimate long-run and short-run equations of imports via many robustness functions. The findings exhibit interesting elasticities to price and to revenue and show the adjustment rate of each type of imported products.
Résumé Ce papier présente une estimation du produit intérieur brut tendanciel marocain depuis 1958. Nous utilisons des techniques avancées, utilisées également par les organismes internationaux publics et privés, comme le lissage... more
Résumé Ce papier présente une estimation du produit intérieur brut tendanciel marocain depuis 1958. Nous utilisons des techniques avancées, utilisées également par les organismes internationaux publics et privés, comme le lissage Hodrick-Presscott et la décomposition de Beveridge-Nelson. Cette estimation a permis d'identifier et de quantifier, via une grille de lecture très étoffée sur les principales variables économiques, monétaires et budgétaires, six cycles conjoncturels. Ces différents cycles montrent les effets marquants du rôle du gouvernement et de l'aléa climatique. Ce dernier semble amplifier l'étendu des cycles. Les cycles du produit intérieur brut hors agriculture semblent relativement plus sensibles à la conjoncture et à l'environnement international surtout de nos principaux partenaires. Abstract This paper estimates the smoothed-GDP of Moroccan economy since 1958. We use advanced techniques, as in the public and private international organizations, suc...
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... Buiter, WH. (1977), Crowding-Out and the Effectiveness of Fiscal Policy, JournalofPublic Economics, 7. Chakraborty, LS. (2007 ... 04Revision. Mitra, Pritha (2006), Has Government Investment Crowded out Private Investment in India? ...
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This paper investigates the long-run equilibrium relationship between the real private and public investment in Saudi Arabia by using ARDL cointegration tests. The finding shows the stable long-run relation between private investment and... more
This paper investigates the long-run equilibrium relationship between the real private and public investment in Saudi Arabia by using ARDL cointegration tests. The finding shows the stable long-run relation between private investment and public investment. The results indicate that the disequilibrium is largely corrected and converges back to the equilibrium in one year and four months, with a speed of adjustment at rate of about 75 per cent a year.This result supports that the Saudi economy is resilient against the shocks.