Working papers

The Syrian Civil War begun in 2011 and is still wreaking enormous damages on the country’s economy, with a significant toll measured in deaths, migration, and the destruction of Syria’s historical heritage and physical infrastructure. This paper examines the impact of the War on Syria’s economy from the perspective of outer space, by-passing the issue of data availability due to the inaccessibility of the war-ravaged territory. The study’s contribution to literature is threefold: first, we estimate the elasticity of Gross Domestic Product (GDP) growth to variation in Night Lights for a balanced panel of 13 Middle Eastern and North African countries. This is in order to obtain alternative measurements of GDP growth and loss potentially overcoming issues resulting from governmental distortion of official statistics in wartime; secondly, we calculate the loss in Syrian GDP after 2011 according to this methodology. We obtain more pessimistic estimates than those reported by international organisations. Finally, extrapolating GDP loss from a spatial analysis of Night Lights reduction, we provide long-term projections for the country’s economy and estimate the window for GDP recovery to pre-war levels. We discuss geo-political implications which could prevent our projections from happening.

We provide new evidence on the participation of firms within Global Value Chains (GVCs) for a large pool of MENA countries included in the World Bank Enterprise Surveys (WBES). Making use of several firm-level GVC participation indices, we find a positive association with firm productivity gains. Based on this result, we further investigate the complexity of GVC relationships and examine how sector/country connectivity affects firm productivity. Using a multi-level model, we augment our analysis by including centrality indicators calculated on the intermediate trade network, constructed from the EORA input-output tables. Positioning within the network structure of trade in intermediate products also plays a role. Our results indicate a positive effect of the connectivity of the sector on the Total Factor Productivity (TFP) of firms. Results remain robust after we control for the endogeneity between firm productivity and participation in GVCs.

This paper analyses the effect of macroeconomic policies on employment. It contributes to the literature in three ways. First, we examine the effect of macroeconomic policies on employment. To do so, we rely on policy tools, rather than policy outcomes, since the former are less endogenous. In other words, we rely on tariffs to measure trade policy (instead of exports and imports), tax rates to measure fiscal policy (instead of government spending) and lending rate (instead of inflation rate) to measure monetary policy. Second, we distinguish between stabilisation policies and structural characteristics. Whilst the aforementioned policies measure the former, we measure the latter by the quality of economic institutions (time to enforce contracts), human capital (spending on tertiary education) and economic diversification (share of fuel exports). Third, we distinguish between the trend and the cyclical components of employment, to show to what extent policy tools have a stabilisation effect (on the cyclical component) or a better allocation effect (on the trend component).