EconPapers    
Economics at your fingertips  
 

Liberalization Process and Financial Instability: A Mediterranean Perspective

Wafa Aidi

Journal of Economic Integration, 2013, vol. 28, 59-84

Abstract: This paper revisits the debate on the financial stability implications of the liberalization process dynamics. We hold that the financial liberalization effect on exchange pressures changes beyond some threshold degrees. Therefore, we assess the ability of the threshold models to gauge financial liberalization dynamics. We provide empirical evidence from 9 MENA countries over the period of 1980 to 2008. Our results suggest that financial integration exerts nonlinear effects on speculative pressure conditionally to the dynamics of the liberalization process. Moreover, the country which maintains an optimal liberalization dynamic will be later exposed to an “exchange pressures“ effect from its financial liberalization process. Alternatively, evolving within nonoptimal dynamics have led to an increase in a country’s vulnerability to speculative pressures since the early stages of liberalization. From this view, the liberal reform dynamics may constitute an important determinant of a country’s financial stability.

Keywords: Sequencing of Liberalization; Financial Integration; Threshold Models; MENA Region (search for similar items in EconPapers)
JEL-codes: C13 C33 F32 F36 G01 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://sejong.metapress.com/ Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0592

Access Statistics for this article

Journal of Economic Integration is currently edited by Jong-Eun Lee

More articles in Journal of Economic Integration from Center for Economic Integration, Sejong University Contact information at EDIRC.
Bibliographic data for series maintained by Jong-Eun Lee ().

 
Page updated 2020-05-22
Handle: RePEc:ris:integr:0592