Measuring the Level of International Capital Mobility for MENA Countries
To achieve sustainable development, it is vitally important to sustain macroeconomic stability, which is closely related to the extent of capital mobility allowed by a country. This paper attempts to measure the level of international capital mobility empirically by estimating the Feldstein-Horioka coefficients employing the panel data for the MENA countries over the period 1963-2007. In empirical analysis, time series properties of the data are examined using recently developed techniques of panel unit root. Having obtained that variables of the model are stationary variables, we use the fixed effect panel model in the analysis of data.The results indicate that capital mobility has always been high in MENA countries but this is particularly obvious for the period 1980-2007, which corresponds to the liberalization period. For the subperiod of 1963-1980, the estimated coefficients are relatively higher, implying the presence of a relatively lower level of capital mobility.
ISSN 1986 – 8502
International Burch University