Mohamed Safouane Ben Aïssa

Adoption of Inflation Targeting and Economic Policies Performance in Emerging Countries: A Dynamic Treatment Effect Evaluation

Abstract This chapter attempts to analyze mainly the interactions between the implementation of inflation targeting (IT) policy and performance in the conduct of economic policies (fiscal and exchange rate) in emerging countries. More precisely, empirical studies conducted in this chapter aim to apprehend the feedback effect of this strategy of monetary policy on the budget deficit and volatility of exchange rate performance. This said, we consider the institutional framework as endogenous to IT and analyze the response of authorities to the adoption of this monetary regime. To do this, the retained methodological path in this chapter is an empirical way, based on the econometrics of panel data. First, our contribution to the existing literature is to evaluate the time-varying treatment effect of IT’s adoption on the budget deficit of emerging inflation targeters, using the propensity score matching approach. Our empirical analysis, conducted on a sample of 34 economies (13 IT and 21 non-IT economies) for the period from 1990 to 2010, show a significant impact of IT on the reduction of budget deficit in emerging countries having adopted this monetary policy framework. Therefore, we can say that the emerging government can benefit ex post and gradually from a decline in their public deficits. Retaining the same econometric approach and sample, we tried secondly to empirically examine whether the adoption of IT in emerging inflation targeters has been effectively translated by an increase in the nominal effective exchange rate volatility compared to non-IT countries. Our results show that this effect is decreasing and that this volatility is becoming less important after the shift to this monetary regime. We might suggest that this indirect and occasional intervention in the foreign exchange market can be made by fear of inflation rather than by fear of floating hence in most emerging countries that have adopted the IT strategy. Finally, we can say that our conclusions corroborate the literature of disciplining effects of IT regime on fiscal policy performance as well as the two controversial effects of IT on the nominal effective exchange rate volatility.

Boosting new venture projects through incubator development programme

This article adopts a resource-based view to help understand why some of the incubators are more successful than others in supporting the development of new science and technology-based firms (NSTBFs). We provide this evidence using an original longitudinal data set collected from a decade-old public incubator programme funded after the passage of the 1999 French law on innovation and research.

The Dynamic Properties of Alternative Assumptions on Price Adjustment in New Keynesian Models

This paper presents a classification of the different new Phillips curves existing in the literature as a set of choices based on three assumptions: the choice of the structure of price adjustments (Calvo or Taylor), the presence of backward indexation and the type of price contracts (fixed prices or predetermined prices). The paper suggests study of the dynamic properties of each specification, following different monetary shocks on the growth rate of the money stock. We develop the analytical form of the price dynamics, and we display graphics for the responses of prices, output and inflation. We show that the choice made for each of the three assumptions has a strong influence on the dynamic properties. Notably, the choice of the price structure, while often considered as unimportant, is indeed the most influential choice concerning the dynamic responses of output and inflation.

What impacts of renewable energy consumption on CO2 emissions and the economic and financial development? A panel data vector autoregressive (PVAR) approach

This study employed a PVAR approach due its numerous advantages to investigate the relative effects of renewable energy consumption on CO2 emissions and the economic and financial development in 24 MENA countries from 1980 to 2012. Results highlight that the degree of effect of renewable energy use is not very pronounced, which implies that the renewable energy sector in these economies is in its immaturity. This study shows that the investigated countries should improve the renewable energy sector through providing banking loans for investment on green energy projects not only to reduce environmental damage but also to promote economic growth simultaneously.

Does inflation targeting decrease the primary budget deficit in emerging markets? An empirical evidence

This paper tries to extend empirically the literature disciplining effect of inflation targeting (IT) monetary policy on fiscal policy. Based on the previous studies including Abo-Zaid and Tuzemen (2011) and Kadria and Ben Aissa (2014) as well as the dynamic panel method (S-GMM) and the treatment effect approach, our contribution is then to evaluate the effect of the ITs adoption by emerging markets on their budgetary discipline in terms of primary budget deficit performance. Our empirical analysis, conducted on a sample of 34 economies (13 IT and 21 non-IT economies) for the period from 1990 to 2010, show that on average IT adoption has had a significant effect in reducing the primary deficit in emerging countries that have adopted this monetary policy framework.

A Copula Approach to Dependence Structure in Petroleum Markets

A copula-generalized autoregressive conditional heteroskedasticity (GARCH) model is used to investigate the conditional dependence structure in the petroleum markets over the recent period 2005–2011. Our results show evidence of a significant and symmetric dependence between the prices of crude oil, gasoline and heating oil. They also indicate that Student- t copulas provide the best fit to the data and that the use of a copula-GARCH model leads to an improvement of the out-of-sample value at risk forecasting accuracy