ARE OUTPUT FLUCTUATIONS TRANSITORY IN THE MENA REGION?

This study analyzes the nonstationarity of per capita real GDP for 11
Middle East and North Africa (MENA) Countries over the period 1970 to
2012 using two recently developed methods. SURADF and CADF panel unit
root tests allowing for cross sectional dependence are used to determine
whether output fluctuations are permanent or transitory. Contrary to the
traditional view of business cycle, we find econometric evidence supporting
the idea that the output fluctuations in MENA region are mostly permanent.
These results also emphasize that the effectiveness of stabilization policies
aimed at real output by the government should be reviewed to achieve longlasting
results.