Time-Varying Casual Nexuses Between Remittances and Financial Development in Some MENA Countries - Economic Research Forum (ERF)

Time-Varying Casual Nexuses Between Remittances and Financial Development in Some MENA Countries

Ilham Haouas, Naceur Kheraief, Arusha Cooray and Syed Jawad Hussain Shahzad

February, 2019


33 pages

F4. Macroeconomic Aspects of International Trade and Finance
F2. International Factor Movements and International Business
O1. Economic Development

This paper examines the causality between remittances (REMs) and financial sector development (FD) in MENA countries. We seek to fill a gap in the extant literature by exploring the inward REMs-financial development nexus across the MENA region via the bootstrap rolling Granger non-causality approach. To identify the changes in the interplay among variables, we apply a series of time-varying rolling window tests based on annual-frequency data from 1980 to 2015. Our findings reveal that any shock (demand, supply, or policy-induced) will have permanent long-run effects on selected indicators. The analysis also point out episodes of directional predictability from FD to REM inflows. However, the results evidenced significant windows of directional predictability from inward REMs to financial development.

Research Fellows

Ilham Haouas

Associate Professor of Economics and Finance, Abu Dhabi University


Naceur Kheraief

Business School of Tunis


Arusha Cooray

University of New South Wales, Sydney, Australia


Syed Jawad Hussain Shahzad

Montpellier Business School, Montpellier France



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