Vulnerability of Southern Mediterranean Countries to Exogenous Shocks: Structural VAR Approach

All statistics and empirical studies relating to the Mediterranean region show the irregular fluctuation of the main macroeconomic aggregates. It is appear that the vulnerability of these countries is largely the result of different range of shocks. Regarding their economic structures, the prospects of growth for Southern Mediterranean countries are largely driven by changes in their external environment. Among the external shocks affecting these countries, we include oil price shocks, terms of trade, the trend of global growth, turmoil in the international financial system, and the crises of international policies (2nd and 3rd war Gulf, event of September 11 ...) and obviously the current global financial crisis. The interest of this work is to determine the various domestic and external shocks affecting the level of economic activity and prices and to identify, later, the main exogenous sources of economic fluctuations in the Southern Mediterranean countries. The sources of fluctuations are determined using a Structural VAR model.