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

Author

Listed:
  • Ilham Haouas

    (Abu Dhabi University)

  • Naceur Kheraief
  • Arusha Cooray
  • Syed Jawad Hussain Shahzad

Abstract

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.

Suggested Citation

  • Ilham Haouas & Naceur Kheraief & Arusha Cooray & Syed Jawad Hussain Shahzad, 2019. "Time-Varying Casual Nexuses Between Remittances and Financial Development in Some MENA Countries," Working Papers 1294, Economic Research Forum, revised 2019.
    • Handle: RePEc:erg:wpaper:1294
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