Financial markets, growth and demography in MENA region

Yeganeh Forouheshfar

Décembre 2017

Université Paris-Dauphine

Sous la direction de Najat EL-MEKKAOUI

This thesis studies the impact of the financial markets on economic growth for MENA region. The first chapter presents a general overview of the region, with a focus on economic, demographic and financial market outlook of the region. In the second chapter an overlapping generation model is presented, which, links economic growth, financial markets and demography. The model is simulated for three countries in the region with diverse demographic trends. The results show that a more efficient financial sector leads to better economic performance and higher employment rates, furthermore, youth are the primary beneficiaries of the reform in the financial sector. The third chapter tests empirically the spillovers from the financial sector to the real sector in 15 MENA countries and finds a negative impact of financial sector development on growth. These results underlines the expansion of an inefficient financial sector in the region, and the urgent need to focus policies that target the efficiency of the sector not just its size. A comprehensive composite index for the financial sector development is developed in the fourth chapter. This index is based on 3 pillars that are, macroeconomic environment, financial institutions and financial markets. It takes into account the specificities of MENA countries and allows us to rank the countries in the region according to their performance in the financial sector.


Keywords : Financial Markets; Development; Economic Growth; MENA Countries; Demographic Change.