Question 1

1. Stolen Dreams or Collateral Damage: Climate and Economic Growth in Time of COVID-19

Accepted Answer

This paper investigates the coupled dynamics of climate and growth in the Middle East and North Africa (MENA) region, considering exogenous shocks such as the COVID-19, with no presumptions on the direction of causality. We utilise temperature and precipitation departures from their historical trends to quantify climate change. We estimate country-specific and panel vector autoregressive models with exogenous variables to supplement existing attempts that integrate climate change in economic modelling. Our findings lend evidence to the interrelation between climate change and economic growth without ruling out bi-directional causality, a reality that many climate studies tend to overlook.   Current Draft

Question 2

2. Corruption, Political Instability and Growth: Evidence from the Arab Spring"

Accepted Answer

This paper empirically investigates the relationship between corruption, political instability and economic growth. We first show how these variables interact by allowing for bidirectional causality between each two of the three variables for which we employ a panel VAR model on a dataset of 140 countries over the period of 1990-2017. Then, we exploit the incidence of the Arab Spring, as an exogenous shock, to measure the short-term effects of political shocks on corruption levels, political stability and economic growth using the differences-in-differences (DiD) framework.   Current Draft

Question 3

3. Cheaper by the Dozen: Family Size Effects on Children’s Educational Attainment in Egypt

Accepted Answer

Education is a crucial determinant of child quality. Economic theory and empirical research suggest a trade-off between the quantity and quality of children. Larger families facing tighter constraints are likely to distribute resources among children unevenly, which can adversely affect educational investment in some children within the same family. This paper investigates the effects of the number and order of siblings on children's educational attainment in Egypt; a developing country that has been overlooked in the literature. For this purpose, we use the Egyptian labor market panel survey between 2006 and 2012. We control for parental family income, age at birth, and other family-level attributes. We find that a child with more siblings is likely to complete elementary school, but less likely to have a high school degree. Our findings are robust to several specification checks. We build on these findings to inform policy making in the areas of education and family planning.   Current Draft

Question 4

4. Are Politically Connected Firms Turtles or Gazelles? Evidence from the Egyptian Uprising

Accepted Answer

Using an original firm-level dataset and utilizing the incidence of the Egyptian uprising of 2011, this paper provides an empirical investigation of the effects of firms’ political connections on employment growth in Egypt. We use the differences-in-differences (DiD) framework to compare employment growth in both politically connected firms (PCFs) and their unconnected counterparts before and after the Egyptian uprising. To minimize possible bias in the DiD estimation due to dealing with a heterogeneous group of firms, we apply the propensity score matching (PSM). We find that politically connected firms have decreased their job creation after the uprising.   Current Draft

Question 5

5. Asymmetric Growth Impact of Fiscal Policy: Evidence from Egypt

Accepted Answer

This paper empirically explores how fiscal policy - represented by changes in government spending- exerts asymmetric effects on economic growth in the context of a developing country, Egypt in particular. By allowing for the theoretical plausibility of asymmetric effects of fiscal policy on economic activity, our research suggests that nothing can guarantee linearity between the growth impact of increasing and decreasing government expenditures. Using a non-linear ARDL model on Egypt data - at both aggregated and disaggregated levels- for the period 1980-2013, this paper provides new evidence of a non-linear relationship between government spending and economic growth.   Current Draft

Question 6

6. Global Financial Crisis, Credit Access and Children: Evidence from Tanzania"

Accepted Answer

This paper investigates the relationship between the recent global financial crisis and child labour in Tanzania. Using the difference-in-difference methodological framework, we identify households' access to credit as a possible transmission channel of the financial crisis to child labour. Unlike most of the existing studies that employ self-reported shocks, we exploit the incidence of the global crisis as an exogenous shock to compare households that were credit recipients before the crisis with households that were not recipients of credit either prior to the crisis or in its immediate aftermath. To deal with possible bias from the endogeneity of access to credit, this study proposes a new instrument that considers the regional concentration of available micro finance institutions and the number of households' assets. Unlike instruments suggested by the existing literature, our proposed instrument incorporates information on both demand and supply sides of credit access irrespective of whether a household has actually received credit. To avoid the wealth effect which would violate the exogeniety condition, we suggest to count the number of the household's assets no matter how much value they possess. By doing so, our instrument utilizes information on how risk averse a household is and therefore their chances of making a successful loan application. The empirical results reveal that a negative shock on credit-recipient households is associated with a significant increase in child labour in Tanzania.   Current Draft

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