Analysis of country convergence dynamics: a multi-dimensional approach

Moubarack Lo, Amaye Sy

Empirical verification of economic convergence between countries, which is carried out mainly through GDP per capita or similar unidimensional indicators, has produced mixed results. This study sets out stages for developing countries on their development path and provides an analysis of the dynamics between them, using an alternative approach to an analysis of convergence based on a single criterion (GDP per capita). In addition, it identifies the factors that determine the belonging of countries to the upper stages of development. In this regard, the performances achieved by the newly industrialised countries in terms of balanced economic growth, structural transformation and diversified exportation, encourage the idea of an identification of a group or “club” of dynamic developing countries that can be called “emerging” countries. The concept of “economic emergence” relies to this idea and builds on the characteristics of these “emerging countries”.

Would the Food Insecure Raise their Hands? Applying the case of Egypt in the era of COVID-19

Racha Ramadan

Food security can be considered an economic access challenge in Egypt, as poverty and food security are highly correlated. The spread of the novel coronavirus, with its economic drawback, is expected to jeopardise Egyptian food security by exacerbating existing challenges. Using the Economic Research Forum (ERF) COVID-19 Monitor data for Egypt (Wave 2), logit models are estimated to examine the determinants of food security in Egypt, during June 2021, post the spread of COVID-19. Two indicators are used to measure food security. First the households’ ability to obtain the usual amount of food, without reporting any change because of a decline in income or increase in prices. This is considered as economic access to food. The second measure considers food consumption; households are considered food secured if they do not have to reduce their usual number of meals/portions. The results show that females, low-educated, self-employed, those working in hard-hit sectors, those who lost their income and households with a high share of children under six years old are all more likely to be food insecure.

The impact of regulatory capital pressure on profitability and risk: Evidence from Tunisian banks

Rim Zakraoui, Dorra Mezzez Hmaied

The paper analyses the effect of regulatory pressure on bank behaviour, using a sample of Tunisian banks covering the period 2005-2020. Firstly, the paper examines the impact of regulatory capital on bank profitability and risk. Secondly, it contributes to the literature which has received scant attention from researchers investigating the nonlinear impact of regulatory pressure on bank behaviour. Thirdly, we consider different determinants of bank profitability and risk. Finally, we use both static and dynamic models to test for the persistence of bank profitability and risk, as well as to make sure that the results are not biased by endogeneity. The results suggest that regulatory capital pressure improves bank profitability and stability. This effect is, however, conditioned by the existence of a certain threshold, after which stringent capital regulation may have adverse effects. Our results have important policy implications on optimal bank capital regulation.

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