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Title:	Unemployment, inflation and energy-growth nexus in the MENA region
Authors:	Qusai Mohammad Qasim Alabed (P85604)
Supervisor:	Fathin Faizah Said, Assoc. Prof. Dr.
Keywords:	Unemployment MENA region Inflation Universiti Kebangsaan Malaysia -- Dissertations Dissertations, Academic -- Malaysia
Issue Date:	2-Jun-2021
Description:	Unemployment, inflation, and economic growth are the most important macroeconomics variables in any economy. These variables have attracted the attention of policymakers and economists for decades due to the ramifications of these main variables on national economies trajectory. Since 2011 (e.g. due to Arab Spring), Middle East and North African (MENA) countries has attracted various attention since political instability in certain countries could affect the GDP, thus lead to higher inflation and unemployment in MENA, based on geographical trade-relation. Thus, it leads to the motivation for this study, mainly on how economic, demographic, and institutional factors affect the unemployment level in the MENA; do demand-pull and cost-push factors contribute significantly to the inflation in the MENA; and what is the effect of the threshold level of the energy-related variables on the economic growth in the MENA. In this regard, the present study characterized into three main objectives. First, the present study extends the determinants of unemployment rates in the MENA region, using a pooled mean group (PMG) estimator as proposed by Pesaran et al. (1999) for the sample of 20 countries and time series period spanning from 1996-2017. Second, this study analyzes the role of demand-pull and cost-push factors in modeling inflation for 20 countries in the MENA region, using a panel vector autoregressive (PVAR) estimator as developed by Holtz-Eakin et al. (1988) from 1990 to 2017. Third, this study examines the asymmetric sensitivity of economic growth to energy-related variables in the 20 MENA countries using a dynamic panel threshold model of Seo et al. (2019) from 1991 through 2014. The new findings of this study revealed that; first, unemployment in the MENA region is influenced by economic determinants such as GDP growth, trade openness, domestic investment, and inflation. Population growth found to be one of the significant demographic factors that caused the high rate of unemployment and the results support the negative impact of institutional quality on unemployment. Second, the findings of this study confirm that both demand-pull and cost-push factors shocks played an important role in shaping the dynamics of inflation in the MENA region. Moreover, the variance decomposition results reveal that demand-pull factors contribute more than cost-push factors in explaining inflation in the MENA region. Third, the results provide strong evidence that is one threshold has been found in the relationship between energy consumption and economic growth, besides, one threshold in the relationship between carbon dioxide emissions (CO2) and economic growth. The results found that energy consumption has a positive and significant effect on economic growth in the low energy consumption regime, whereas it has a negative and significant effect on economic growth in the high energy consumption regime. Moreover, the results found that CO2 emissions are positively and significantly related to economic growth in the low-regime of CO2 emissions. Nevertheless, a significant negative relationship found between CO2 emissions and economic growth in the high-regime of CO2 emissions. For policy implication, the study suggests; first, that effective fiscal, monetary, and trade policies implementation considering shift unemployment to the equilibrium point. Government policies should pay attention to young people by increasing investments to create more job opportunities for them and focus on skill-oriented programs to develop their qualifications. Moreover, improvements in the institutional environment should not be ignored to get good institutional quality factors. Second, central banks should control the liquidity of money without causing economic depression and implement a more effective exchange rate policy. Moreover, monetary construction could be a powerful tool for controlling inflation in the MENA region. Third, policymakers should implement other effective energy policies such as more stringent regulations of CO2 emissions, increase the efficiency of energy use, and replace fossil fuels sources of energy by cleaner energy sources to avoid unnecessary CO2 emissions and to combat global warming. Recommendations for future studies include, formulating a nonlinear Panel ARDL for unemployment, Big Data Analytics approach to identify the root causes of failures and issues in real time for inflation as well as linking the energy-growth nexus towards achieving 2030 Sustainable Development Goals (SDGs) Agenda, for Goal 7: Affordable and Clean Energy.,Ph.D
Pages:	190
Publisher:	UKM, Bangi
Appears in Collections:	Faculty of Economy and Management / Fakulti Ekonomi dan Pengurusan

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