Institute of Money and Banking

 RESEARCH PROJECTS 
 ARTICLES, BOOKS AND REPORTS 
 MASTER'S PROJECTS 
 
 

RESEARCH PROJECTS
 

War and economics, the economic development of Lebanon, 1950-1998

The study aims primarily to document and critically assess Lebanese economic performance within the context of the evolving political/military environment in each of the three distinct phases which the period covers (the pre-1975 phase, the 1975-1990 war phase and the first post Taif phase,1990-1998). The quantitative and qualitative (socio-economic) dimensions of development are recurring themes throughout. They form the basis for a critical assessment of two questions, which we pose in the final chapter: what are the major economic lessons of the Lebanese experience? How do these lessons enhance our understanding of the workings of small open economies in an increasingly inter-connected and open world? (A book length study under preparation for Cambridge University Press.) S. Makdisi.
 
 

The private sector, the Arab economies and globalization

The project aims to investigate major aspects of the role of the Arab private sector in economic development in the context of the on-going globalization process. It comprises a series of papers that deal with the following topics: (i) institutional capacities, private investments and economic growth (ii) macro-economic aspects of foreign direct investments in the context of globalization (iii) competitiveness of the Arab industrial sector (iv) Arab financial markets and (v) the private sector and the financing of infra-structure. These research papers are intended to help draw policy conclusions regarding the role that the Arab private sector may play in promoting economic development under the emerging world economic conditions. (Under preparation for the Arab Fund for Economic and Social Development and the Arab Monetary Fund.) S. Makdisi.
 
 

Towards Arab economic co-operation in the context of globalization

The paper reviews the reasons behind the failure of past moves towards close Arab economic co-operation and examines the challenges, which face future Arab economic unity in the context of the on-going globalization process. It argues for the implementation of the Arab Free Trade Area as a preparatory step towards the creation of an Arab common market. (Paper completed and will appear in Arab Economic Co-operation: Regional vs. Global Dimensions to be published by the Arab Thought Forum and the Shuman organization.) S. Makdisi.
 
 

Arab monetary integration, the European experience and globalization

Drawing on the European experience, the paper sets out the lessons which be derived in attempting to forge closer intra-Arab closer economic co-operation. It draws attention to the political factor (the political appeal of a united Europe as one economic bloc) and the gradual convergence of economic policies as significant supporting factors which ensured the success of the European move towards economic unity. The paper then discusses to what extent these factors exist in the present Arab World and what steps should be undertaken to strengthen them. (Paper completed and will appear in the Impact of the Euro on the Economies of the Arab Countries to be published by the Arab Monetary Fund.) S. Makdisi.
 
 

Economic implications of future Arab development models

The paper addresses the issues of past and future Arab developmental models. It examines in particular the theses of the so-called independent development in the Arab World: its implications and constraints in an increasingly open world economy. (Completed and forthcoming in The Arab Economy and the Challenges of the Twenty First Century, to be published in the proceedings of the fifth Annual Meeting of the Arab Society for Economic Research, held in Cairo, November 1998.) S. Makdisi.
 
 

The role of financial markets in privatization in the ESCWA region

(Completed and forthcoming in Institutional Aspects of Privatization, proceedings of a seminar held by the Economic Commission for Western Asia in Beirut, December 1997.) S. Makdisi.
 
 

A perspective on the dollar-euro exchange rate: implications for the peripheral Mediterranean countries

There has been considerable interest in recent years in the prospective dollar-euro exchange rate motivated by the launching of the single currency in Europe. This project studies various factors that may constitute the main determinants of the dollar-euro exchange rate. In particular, it argues that the initial effect, after the introduction of the euro, will be an appreciation in the value of the euro against the US dollar arising from shifts in demand towards the euro. The Mediterranean peripheral countries cannot afford to be passive viewers of these fundamental changes in Europe. This project will therefore examine the implications of the introduction of the single currency in Europe on Mediterranean central banks’ reserves, trade and capital flows, and private portfolio diversification. It will show that the euro will rival the dollar and will assume its leading role in the region. Funded by Euro-Mediterranean Forum of Economic Institutes, (FEMISE). S. Neaime
 
 

A logistic model for evaluating the performance of Lebanese banks

With 78 banks in operation, Lebanon is considered flagrantly overbanked. To make things worse, the steep devaluation of the LP in early 90’s eroded most of their capital base, raising questions about their viability as independent institutions in the future. Using annual bank data from BILANBANQUES between 1982-97, we propose a logistic model to assess the probability of potential bank failure. Combining macroeconomic and bank-specific financial data, our study will shed light on the significance of the systemic risk in explaining bank failure. (Paper under preparation for presentation at the Economic Research Forum Sixth Annual Conference, Cairo, Egypt, October 1999.) S. Neaime and S. Hakim*.
 
 

Perspectives on the integration of some financial markets in the MENA region

This paper analyzes the growth, performance, and properties of the MENA (Middle East and North Africa) stock markets between 1990 and 1998. Our focus on this region is prompted by the fact that the MENA stock markets are often regarded as a group apart from other emerging or international markets. They serve as good examples of newly emerging capital markets with significant growth potential. Our results show that the stock markets of Cairo, Casablanca and Istanbul are already integrated with world markets, but that Amman, Kuwait, Bahrain, and Riyadh offer unique risk-return characteristics to investors seeking international diversification. Among the inter-MENA markets, we find little evidence of linkages casting doubt about the claim that the MENA markets are regionally integrated. (In C. C. Praskevopoulos, et al. eds., paper completed and forthcoming in Global Financial Instability, Toronto, Canada: APF Press.) S. Neaime and S. Hakim*. (Funded By URB.)
 
 

Using the yield curve to predict inflation in the emerging economies of the ERF

This paper examines the links between nominal interest rates and the future path of inflation using the term structure of two emerging economies in the ERF. Our results indicate that the yield curve reflects significant information about inflation in the Treasury securities with maturity three, six, and twelve months. Granger causality tests indicate a strong correlation emanating from tslope of the yield curve to inflation, but not the other way around. Regression results show that the slope of the yield curve becomes steeper in anticipation of higher inflation. Specifically, the slope of the yield curve reflects significant information about the evolution of price level with the longest maturity spread providing the best forecast and moving in tandem with inflation. The short-end of the yield curve has little information content about the future path of prices. (Paper completed and forthcoming in Regional Trade, Finance and Labour Markets, [proceedings of the ERF fifth annual conference held in Tunis, September 1998].) S. Neaime, S. Andary, and S. Hakim*.
 
 

Habits and durability in consumption and the effects of exchange rate policies

A model in which consumption exhibits durability, and habits develop over the flow of services provided by them, is used to study the effects of exchange rate policies. It is shown that, after a change in the rate of devaluation, the adjustment of consumption, real money holdings, and the country’s net foreign asset position will very likely be non-monotonic, with these variables overshooting their long run levels during the adjustment process.(Paper completed and submitted to the Journal of Macroeconomic Dynamics, Cambridge University Press.) S. Neaime and A. Mansoorian*.
 
 

Habits and durability in consumption and the effects of tariff protection

Some recent empirical findings are used to motivate employing a model in which consumption exhibits durability, and habits develop over the flow of services provided by them, in order to study the effects of tariff protection on the current account. Durability leads to adjacent substitutability in consumption, while habits are assumed to lead to adjacent complementarity. If the durability effects are dominant in the short run, and habit effects in the long run, then tariffs will lead to a current account surplus, which will be followed by a deficit. In the opposite case a deficit will be followed by a surplus. (Paper completed and submitted to the Journal of Economic Letters, Harvard University Press.) S. Neaime and A. Mansoorian*.
 
 
 
 

ARTICLES, BOOKS AND REPORTS

 

Makdisi, Samir, Economic developments in the ESCWA region. In The ESCWA Region: Twenty-Five Years 1974-1999, Political, Economic and Social Developments. United Nations, 1999.

———, Lebanon: public debt and economic policy. Arab Economic Journal, (16), Summer 1999.

———, Comments on the effective financing of teaching: the roles of the public and private sectors, in Human Resources Development and Economic Growth, ed. T. Kanaan. Arab Monetary Fund/Arab Fund for Economic and Social Development, 1999.

———, Globalization, economics and Arab development, in The Arabs and Globalization. Beirut: Center for Arab Unity Studies, 1998.

———, Sustainable Development in Lebanon. In Entry Points for Sustainable Human Development in Lebanon. A UNDP Report, July 9, 1997.
 
 
 
 

Abou Merhi, F., Electronic banking: development and challenges (1999). S. Neaime and L. Hobeika.

Afram, G., Banking structures in selected Middle Eastern countries (1997). S. Andary and M. Barakat.

Al-Khatib, M., Options on Lebanese treasury bills: the effect of liquidity (1998). S. Makdisi and I. Itani.

Ataya, A., Financial markets of Turkey and Bahrain (1999). S. Neaime Bardawil, B., Stock selection and portfolio optimization (1998). S. Andary and Z. Shehadeh.

Barghout, L. I., Dollarization in Lebanon: issues and policies (1997). S. Andary and I. Itani.

Bouhsaly, D., The exchange rate as an instrument policy in Lebanon (1998). S. Andary and G. Youssef.

Chebaro, R. Insurance companies in Lebanon: regulation and financial analysis (1997). S. Andary and Y. Sidani.

Copty, A., The development of the Eurobond market (1999). S. Neaime and L. Hobeika.

Dabbagh, M., The largest bank merger in history: Citicorp/Travelers (1999). S. Neaime and L. Hobeika.

Dabbous, M., Islamic banks and traditional banks: a comparative study (1997). S. Andary and T. Chambour.

Dadour, C., Tapping the Lebanese and international capital and equity markets: Eurobonds, CDs, and GDRs (1997). S. Andary and L. Hobeika.

El Khatib, K., Financial engineering (1999). S. Neaime and L. Hobeika.

Fakhoury, H., The restructuring of the Beirut stock exchange: a modern structure for the Lebanese financial markets (1997). S. Andary and T. Shwayri.

Fattal, G., The interaction of the dollar yen currencies (1997). S. Andary and T. Shwayri.

Franjieh, G., Bank mergers and acquisitions: theory and evidence (1998). S. Andary and S. Neaime.

Ghannoum, D., The Saudi Arabian stock market (1999). S. Neaime and I. Itani.

Ghosn, N., The introduction of derivatives in the Lebanese market (1997). S. Andary and E. Joujou.

Harrouk, V., The Russian crisis (1999). S. Neaime and L. Hobeika.

Hibri, K., Leasing: a financial tool in Lebanon (1997). S. Andary and T. Chambourd.

Hijazi, R., An assessment for the debt burden (with reference to Lebanon) (1997). S. Andary and S. Makdisi.

Kaissi, M., Investment banking with reference to the Lebanese market (1999). S. Neaime and L. Hobeika.

Khoury, K., Securitization: issues and prospects (1997). S. Andary and Y. Sidani.

Khoury, R. Mutual funds: applications in Lebanon (1997). S. Andary and T. Chambourd.

Koteich, R., The Middle East peace process and its impact on Arab economies (1999). S. Neaime and L. Hobeika.

Kronfol, Z., Efficiency in the Lebanese banking sector (1998). S. Andary and L. Hobeika.

Mahboub, D., Concentration and growth (1997). S. Andary and L. Hobeika.

Makarem, C., Monetary policy in Lebanon ,1992-1998 (1999). S. Neaime and L. Hobeika.

Nakhlawi, M., The general agreement on trade in services: implications for the financial sector in Lebanon (1999). S. Neaime and S. Makdisi.

Naoum, R., Fiduciary accounts: a comparative study (1997). S. Andary and I. Najjar.

Nasreddin, R., Different approaches to bank reserve requirements (1997). S. Andary and Y. El-Khalil.

Nassar, D., The emerging Arab financial markets (1999). S. Neaime and L. Hobeika.

Onsi, T., The evolution of the insurance policy in Lebanon (1998). S. Makdisi and L. Hobeika.

Salem, L., EMU and its effects on financial markets (1998). S. Andary and J. Azour.

Saliba, N., Deposit insurance schemes: a prospective and proposed reform program for Lebanon (1999). S. Neaime and S. Makdisi.

Sharaf, F., Privatization in Jordan (1997). S. Andary and L. Hobeika.

Tiller, T., Syndicated credit with reference to Lebanon (1999). S. Makdisi and J. Azour.

Yammouny, S., Developing credit services in Lebanese banks (1998). S. Andary and T. Shwayri.