Nexus between poverty gap and macroeconomic performance in the MENA region during the period 1990-2021

Fatma Ahmed Hassan ()
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Fatma Ahmed Hassan: Assistant Professor of Economics, College of Business & Administration, Princess Nourah bint Abdulrahman University (KSA).

Technium Social Sciences Journal, 2023, vol. 44, issue 1, 750-763

Abstract: The study aims to explore the impact of some macroeconomic performance indicators on the poverty gap in the countries of the Middle East and North Africa during the period 1990-2021. The study used the econometric approach, where a correlation matrix was built between the variables under study, which is the poverty gap as a dependent variable, and several independent variables, which are the rate of inflation, the rate of population growth, the rate of economic growth, and the ratio of reserves to external debt. Applying Unit Root test, then ARDL model to investigate the effect of independent variables on the poverty gap and using E-Views 12. The study found that In the short and long term, the rate of inflation is associated with an inverse relationship with poverty rates in the countries of the Middle East and North Africa during the period 1990-2021, the increasing ratio of reserves to external debt has a negative impact on the poverty rates in the MENA countries, the increasing exports had a positive impact to decreasing poverty in MENA region, while the population growth rate is associated with a direct negative impact on the poverty gap in those countries, it has the highest influence compared to the other macroeconomic variables. And the relationship between them goes in the same direction, The study confirmed that after (1) lag period GDP growth negatively affects the poverty gap, thus with an increase in the GDP the poverty also increases, but after (2) lag periods the study confirmed the positive impact of GDP growth on the poverty gap. So the study recommends applying economic policies that reduce inflation rates by using fiscal policy tools through reducing government spending or raising tax rates. Raising export rates through an industrial policy and agriculture that supports the quality and competition of local products in global markets, as well as raising the reserve ratio to the total external debt, which may occur in the event of an improvement in export rates accordingly. It also requires population policies that reduce population growth rates. And finally, economic growth couldn’t reduce poverty without economic policies raising equality degree between individuals

Keywords: Poverty gap; Total Reserves / External Debt; Exports; Population; GDP Annual Growth; Inflation; Middle East and North Africa (MENA) (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:tec:journl:v:44:y:2023:i:1:p:750-763

DOI: 10.47577/tssj.v44i1.9016

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