Papers by Sarah El-khishin
What Determines Housing Prices in Egypt?
Social Science Research Network, 2024
The Trinity of Budget Institutions, Political Institutions and Fiscal Cyclicality: Evidence from Egypt
Social Science Research Network, Oct 1, 2019
Review of Economic and Political Science, Feb 22, 2021
Purpose-This paper aims to assess to what extent the COVID-19 shock is expected to create a debt ... more Purpose-This paper aims to assess to what extent the COVID-19 shock is expected to create a debt crisis in emerging markets and developing economies (EMDEs) through two main questions: what are the main determinants of EMDEs external vulnerability? How vulnerable are EMDEs to the current COVID-19 shock compared to the global financial crisis (GFC)? Design/methodology/approach-In addition to a descriptive analysis of the determinants of EMDEs external vulnerability, this paper designs two sub-indices of overindebtedness and financial fragility that capture EMDEs' distinct characteristics. The two sub-indices together illustrate the overall external vulnerability to the current shock. Findings-EMDEs are more vulnerable compared to the GFC era. Current debt threats arise mainly from debt architecture and the domination of volatile debt formsprimarily foreign currency-denominated bonds. Excessive fear of debt-deflation spirals after the GFC prompted EMDEs to expand their growth trajectories through a pattern of cheap private lending, loose measures and unmonitored fiscal expansion. Research limitations/implications-Conclusive post-crisis data are still unavailable. Practical implications-EMDEs need to balance between temporary accommodative measures and a post-shock policy mix that prevent a deflation spiral without worsening indebtedness and financial fragility. Moreover, financial prudence in face of growing credit demand is crucial, particularly in light of the monetary expansion and injected liquidity. Originality/value-The indices offer a framework for examining external vulnerability in EMDEs based on theoretical and historical revisions, IMF benchmarks and EMDEs specific debt characteristics. The indices components can be offered for empirical examination in separate future research once conclusive data become available.
Modifying the Path of Fertility Rates to Accelerate Egypt's Entry in the Demographic Window (in Arabic)
Countermeasures for the COVID-19 Outbreak in Egypt: This Time is Really Different
The Role of Polices in Speeding the Demographic Transition: A Case Study of Some East Asian Countries and Lessons Learnt
The paper investigates the factors behind the slowdown in demographic transition in Egypt across ... more The paper investigates the factors behind the slowdown in demographic transition in Egypt across different geographical and socio-economic groups. The authors relax the assumption of a uniform fertility behavior across households and re-visit interrelationships between demography and economic indicators from a micro perspective. Empirical findings reject mainstream beliefs that slow demographic transition in Egypt is attributed to the poorer, south-located and less-educated households. Fertility behaviors in Urban Egypt and among the high-educated females are found to be key contributors to the slowdown of demographic transition. Unemployment among the high-educated females in addition to lower public and foreign spending on family planning that accompanied political instabilities following January 25th revolution escalated the demographic pressures further. These findings have implications on the appropriate future demographic policies needed to speed up demographic transition in E...
A Micro-Investigation of the Reasons Behind the Slowdown of Demographic Transition in Egypt: Will Egypt Witness a Demographic Window?
PSN: Population & Family Planning (Topic), 2017
The paper investigates the factors behind the slowdown in demographic transition in Egypt across ... more The paper investigates the factors behind the slowdown in demographic transition in Egypt across different geographical and socio-economic groups. The authors relax the assumption of a uniform fertility behavior across households and re-visit interrelationships between demography and economic indicators from a micro perspective. Empirical findings reject mainstream beliefs that slow demographic transition in Egypt is attributed to the poorer, south-located and less-educated households. Fertility behaviors in Urban Egypt and among the high-educated females are found to be key contributors to the slowdown of demographic transition. Unemployment among the high-educated females in addition to lower public and foreign spending on family planning that accompanied political instabilities following January 25th revolution escalated the demographic pressures further. These findings have implications on the appropriate future demographic policies needed to speed up demographic transition in E...
Development Economics: Regional & Country Studies eJournal, 2018
- Demographic-economic interrelationships have been broadly examined in the literature from a mac... more - Demographic-economic interrelationships have been broadly examined in the literature from a macro perspective using mostly cross-country panel regressions. A limited strand of literature has emphasized the need to examine the demographic-economic dynamics in a reversed way; inspect dual-causality relation between demographic and economic factors. In this paper, I examine the effect of changes in income distribution and fertility behavior on the speed of demographic transition. I moreover examine the reverse relation by testing effect of changed household structure on income distribution and income disparities in Egypt. Empirical results show that wealth redistribution in Egypt and moving up to higher wealth quintiles did not have a significant effect on decreasing child dependency. Moreover, results also indicate that demographic transition process and the decline in dependency levels that took place since the nineties of the past century didn’t have a significant effect on income...
Economies, 2021
This paper examines the relationship between fiscal and external balances in MENA oil versus non-... more This paper examines the relationship between fiscal and external balances in MENA oil versus non-oil countries in the context of the twin deficits hypothesis (TDH) using Panel Vector Autoregression- Generalized Methods of Moments PVAR GMM estimation, Granger Causality and IRFs. The essence of this analysis is to assess the vulnerability of fiscal and external balances to oil price dynamics and regional geopolitics in the region. Results show that a twin-deficit problem exists in MENA oil-rich countries only while the problem does not exist in non-oil ones. This affirms the hypothesis that oil dependence results in high fiscal vulnerability to geopolitical shocks that automatically transmits to external balances. While a TDH isn’t proven to exist in non-oil countries, fiscal and external balances problems result from longstanding structural factors. A high reliance on tourism revenues and remittances as main sources of foreign currency receipts (together with poor tax administration ...
SSRN Electronic Journal, 2020
Purpose-This paper aims to assess to what extent the COVID-19 shock is expected to create a debt ... more Purpose-This paper aims to assess to what extent the COVID-19 shock is expected to create a debt crisis in emerging markets and developing economies (EMDEs) through two main questions: what are the main determinants of EMDEs external vulnerability? How vulnerable are EMDEs to the current COVID-19 shock compared to the global financial crisis (GFC)? Design/methodology/approach-In addition to a descriptive analysis of the determinants of EMDEs external vulnerability, this paper designs two sub-indices of overindebtedness and financial fragility that capture EMDEs' distinct characteristics. The two sub-indices together illustrate the overall external vulnerability to the current shock. Findings-EMDEs are more vulnerable compared to the GFC era. Current debt threats arise mainly from debt architecture and the domination of volatile debt formsprimarily foreign currency-denominated bonds. Excessive fear of debt-deflation spirals after the GFC prompted EMDEs to expand their growth trajectories through a pattern of cheap private lending, loose measures and unmonitored fiscal expansion. Research limitations/implications-Conclusive post-crisis data are still unavailable. Practical implications-EMDEs need to balance between temporary accommodative measures and a post-shock policy mix that prevent a deflation spiral without worsening indebtedness and financial fragility. Moreover, financial prudence in face of growing credit demand is crucial, particularly in light of the monetary expansion and injected liquidity. Originality/value-The indices offer a framework for examining external vulnerability in EMDEs based on theoretical and historical revisions, IMF benchmarks and EMDEs specific debt characteristics. The indices components can be offered for empirical examination in separate future research once conclusive data become available.
Journal of Governance and Regulation, 2022
This paper examines how rules and institutions and monetary-fiscal coordination setup impact welf... more This paper examines how rules and institutions and monetary-fiscal coordination setup impact welfare outcomes during political instability. Our theoretical model extends the analysis of Alesina and Tabellini (1987), Alesina and Gatti (1995), and Ferre and Manzano (2014) to examine the signaling content of the fiscal authority’s decision to engage in a fiscal reform when the policymaker’s preferences are private information. In a two-stage signaling game featuring a central banker, a government, and private agents, we examine the fiscal authority’s decision to engage in a fiscal reform under a Nash game, a cooperative setup, and a model of Stackelberg leadership. Three main results: 1) rules and commitments contribute to decreasing time inconsistency; 2) the more control the fiscal authority has over monetary policy, the more undesirable welfare outcomes, especially during political instability; 3) central bank independence signals fiscal discipline and produces relatively more desir...
Monetary-Fiscal Games Under Political Uncertainty: The Role of Institutions
SSRN Electronic Journal, 2020
The paper examines how rules and institutions as well as the monetary-fiscal coordination setup i... more The paper examines how rules and institutions as well as the monetary-fiscal coordination setup impact welfare outcomes of a reform during uncertainty shocks. We define uncertainty shocks as sudden events that create ambiguity about future course of economic policies chosen by policy makers as well as the possible responses of economic agents to the new policies. We examine uncertainty within a framework of interaction between several institutional factors: (1) the scheme of coordination between monetary and fiscal authorities, (2) credibility and reputation of authorities and (3) the degree of dependence on discretionary measures as opposed to commitments. Through a game theoretic model, we show that: first, a reform implemented under fiscal dominance accompanied with dependence on discretionary measures result in worst welfare outcomes that are magnified when uncertainty parameters are involved. Second, in the case of central bank independence and immunity to fiscal concerns, reforms signal fiscal discipline and produce desired outcomes. Third, proper fiscal rules and commitments under a scheme of benevolent and coordinating authorities are second best during uncertainty shocks and relatively lessen undesired outcomes due to higher credibility and lower time inconsistency. The results offer important policy implications in developing countries with structural fiscal and monetary problems where hazards of fiscal dominance, reliance on politically-driven discretionary interventions and lacking efficient rules and institutions are magnified during spells of political crises and usually result in undesirable welfare gains.
The Trinity of Budgetary Institutions, Political Institutions and Fiscal Cyclicality: Evidence From Egypt
Development Economics: Macroeconomic Issues in Developing Economies eJournal, 2019
Fiscal policy is empirically proven in many papers as procyclical in developing countries as a re... more Fiscal policy is empirically proven in many papers as procyclical in developing countries as a result of longstanding weaknesses in budgetary and political institutions. We investigate the cyclicality of fiscal policy in Egypt and the influence of budgetary and political institutions on fiscal indicators during economic cycles. We measure the cyclicality of different components of the Egyptian budget in a disaggregated manner. Golden rule violation in Egypt adversely affected fiscal aggregates and contributed to adopting a countercyclical behavior during business cycles; then a procyclical policy over the long run when debt and deficit reach uncontained levels. Moreover, common pool, principal-agent and voracity problems in Egypt have also influenced the cyclicality of fiscal policy in Egypt as they have lead into an exacerbated pressure on public expenditure during booms and recessions in the examined period. Re-adopting the Golden rule to control the current spending trends and li...
Journal of Governance and Regulation, 2021
We investigate the cyclicality of fiscal policy in Egypt during the period of 1976–2019 with a fo... more We investigate the cyclicality of fiscal policy in Egypt during the period of 1976–2019 with a focus on how budgetary and political institutions affect fiscal performance during economic cycles. We define new variables for budgetary and political institutions and incorporate them in a vector error correction model (VECM) and impulse response functions (IRFs) analysis. While current and capital spending are proven to behave procyclically, revenues respond countercyclically during business cycles. Poor political and budgetary institutions have a negative impact on the primary deficit in a way that led to procyclical behaviour in fiscal policy in the long run. We recommend reinforcing the Golden Rule and changing the nature of the electoral system to a party-based to strengthen the role of parliament in keeping the government accountable
Fiscal Governance in Egypt: Strengthening Budgetary Institutions to Counteract Political Fragmentation
Political Economy: Budget, 2016
The paper contributes to discussions on budgetary institutions and fiscal governance in Egypt. It... more The paper contributes to discussions on budgetary institutions and fiscal governance in Egypt. It explores the interrelationships between budgetary institutions, political factors and fiscal performance. We investigate the intricacies between the structure and quality of budget institutions and fiscal performance and the key weaknesses in budgetary institutions in Egypt. We also analyze to what extent these weaknesses aggravated adverse effects of political fragmentation on fiscal performance in Egypt. Finally, we highlight the major challenges in the institutional-political-fiscal paradigm in Egypt. Added to the known medium-term reforms in budgetary institutions, the paper recommends three urgent reforms in these institutions. The first procedure is applying a top-down approach during budget vote to be on two separate stages. In the first stage of budget vote, the parliament votes on the fiscal aggregates, while in the second stage the parliament votes on the allocation of resourc...