Politická ekonomie 2025, 73(6):986-1014 | DOI: 10.18267/j.polek.1469

Inflation Persistence in Selected MENA Countries: What Has Changed Since the Advent of the Arab Spring?

Sidi Mohammed Chekouri ORCID..., Abderrahim Chibi ORCID..., Mohamed Benbouziane ORCID...
Sidi Mohammed Chekouri (corresponding author), Department of Economics, University Centre of Maghnia, LEPPESE Laboratory, Maghnia, Algeria
Abderrahim Chibi, Department of Economics, University Centre of Maghnia, LEPPESE Laboratory, Maghnia, Algeria
Mohamed Benbouziane, Department of Economics, University of Tlemcen, MIFMA Laboratory, Tlemcen, Algeria

This paper aims to empirically investigate the dynamic behaviour of inflation rates in four countries in the Middle East and North Africa (Algeria, Egypt, Morocco and Tunisia) based on the assumption that inflation has become more persistent in the aftermath of the Arab Spring. The study analyses whether the inflation dynamics in these countries have exhibited any differences after the Arab Spring period. To do so, we conduct an analysis based on the quantile autoregressive (QAR) unit root approach for before and after the Arab Spring. Our findings indicate that the inflation rates in the studied MENA countries exhibit high persistence in the period after the Arab Spring (2011-2023). As a result, shocks that hit inflation may not remain transitory and instead have a persistent inflationary effect. From a policy perspective, our findings suggest that monetary authorities in the selected MENA countries should not tolerate an increase in inflation, even if it is deemed transitory.

Keywords: Inflation persistence, unit root test, quantile unit root test, MENA countries
JEL classification: C22, E31, P44

Received: July 12, 2024; Revised: October 15, 2024; Accepted: October 22, 2024; Published: December 9, 2025  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Chekouri, S.M., Chibi, A., & Benbouziane, M. (2025). Inflation Persistence in Selected MENA Countries: What Has Changed Since the Advent of the Arab Spring? Politická ekonomie, 73(6), 986-1014. doi: 10.18267/j.polek.1469
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Abu Hatab, A. (2016). Food Price Volatility and Political Unrest: The case of the Egyptian Arab Spring. CIHEAM Watch Letter No. 36/2016.
    2. Ahmad, T. (2020). The Enduring Arab Spring: Change and Resistance. Indian Foreign Affairs Journal, 15(2), 91-107.
    3. Altissimo. F., Ehrmann, M., Smets, F. (2006). Inflation Persistence and Price-setting Behavior in the Euro Area: A Summary of the IPN Evidence. European Central BankOccasional Paper No. 46. Go to original source...
    4. Andrews, D. W. K., Chen H.-Y. (1994). Approximately median-unbiased estimation of autoregressive models. Journal of Business & Economic Statistics, 12(2), 187-204. https://doi.org/10.2307/1391483 Go to original source...
    5. Angeloni, I., Coenen G., Smets, F. (2003). Persistence, the transmission mechanism, and robust monetary policy, European Central Bank Working Paper No. 250. Go to original source...
    6. Antonakakis, N., Cunado, J., Gil-Alana L., et al. (2016). Is inflation persistence different in reality? Economic Letters, 148, 55-58. https://doi.org/10.1016/j.econlet.2016.09.003 Go to original source...
    7. Arab Barometer (2024). Arab Barometer Wave III. (2012-2014). [Retrieved 2024-02-05] Available at: https://www.arabbarometer.org/survey-data/#surveys-grid
    8. Bahmani-Oskooee, M., Chang, T., Ranjbar, O. (2016). Fourier Quantile Unit Root with Application to PPP Hypothesis in OECD. Applied Economics Quarterly, 63(3), 295-318. https://doi.org/10.3790/aeq.63.3.295 Go to original source...
    9. Baum, C. F. (2005). Stata: The language of choice for time-series analysis? The Stata Journal, 5(1), 46-63. https://doi.org/10.1177/1536867X0500500110 Go to original source...
    10. Bilici, B., Çekin, S. E. (2020). Inflation persistence in Turkey: A TVP-estimation approach. Quarterly Review of Economics and Finance, 78(C), 64-69. https://doi.org/10.1016/j.qref.2020.04.002 Go to original source...
    11. Bolat, S., Tiwari, A. K., Kyophilavong, P. (2017). Testing the inflation rates in MENA countries: Evidence from quantile regression approach and seasonal unit root test. Research in International Business and Finance, 42, 1089-1095. https://doi.org/10.1016/j.ribaf.2017.07.043 Go to original source...
    12. Cogley, T., Sbordone, A. M. (2008). Trend Inflation, Indexation, and Inflation Persistence in the New Keynesian Phillips Curve, American Economic Review, 98(5), 2101-2126. https://doi.org/10.1257/aer.98.5.2101 Go to original source...
    13. Cogley, T., Sargent, T. J. (2005). Drifts and Volatilities: Monetary Policies and Outcomes in the Post WWII U.S. Review of Economic Dynamics, 8(2), 262-302. https://doi.org/10.1016/j.red.2004.10.009 Go to original source...
    14. Clemente, J., Montanes, A., Reyes, M. (1998). Testing for a unit root in variables with a double change in the mean. Economics Letters, 59(2), 175-182. https://doi.org/10.1016/S0165-1765(98)00052-4 Go to original source...
    15. De Oliveira, F. N., Petrassi, M. (2014). Is Inflation Persistence Over? Revista Brasileira de Economia, 68(3). Go to original source...
    16. Dossche, M., Everaert, G. (2005). Measuring inflation persistence: a structural time series approach. Eurosystem inflation persistence network. Working paper research no. 70. Go to original source...
    17. Dua, P., Goel, D. (2021). Inflation Persistence in India. Journal of Quantitative Economics, 19, 525-553. https://doi.org/10.1007/s40953-021-00237-z Go to original source...
    18. Fuhrer, J. C. (2009). Inflation persistence. FRB of Boston Working Paper No. 09-14. Go to original source...
    19. Gaglianone, W. P., de Carvalho Guillén, O. T., Rodrigues Figueiredo, F. M. (2018). Estimating inflation persistence by quantile autoregression with quantile-specific unit roots. Economic Modelling, 73, 407-430. https://doi.org/10.1016/j.econmod.2018.04.018 Go to original source...
    20. Canarella, G., Miller, M. S. (2016). Inflation Persistence and Structural Breaks: The Experience of Inflation Targeting Countries and the US. University of Connecticut: Department of Economics Working Paper 2016-11.
    21. Granville, B., Zeng, N. (2019). Time variation in inflation persistence: New evidence from modelling US inflation. Economic Modelling, 81(C), 30-39. https://doi.org/10.1016/j.econmod.2018.12.004 Go to original source...
    22. Geronikolaou, G., Spyromitros, E., Tsintzos, P. (2020). Progressive taxation and human capital as determinants of inflation persistence. Economic Modelling, 88(C), 82-97. https://doi.org/10.1016/j.econmod.2019.09.011 Go to original source...
    23. Hansen, B. (1995). Rethinking the univariate approach to unit root tests: How to use Covariates to increase power. Economic Theory, 8, 1148-1171. Go to original source...
    24. IMF (2023). Regional Economic Outlook: The Middle East and Central Asia. Safeguarding Macroeconomic Stability amid Continued Uncertainty in the Middle East and Central Asia. Washington, D.C.: International Monetary Fund, Publication Services. ISBN 9798400238284.
    25. IMF (2022). Transcript of October 2022 Middle East and Central Asia Department Press Briefing. [Retrieved 2024-02-05] Available at: https://www.imf.org/en/News/Articles/2022/10/13/tr101322-transcript-of-mcd-press-briefing
    26. IMF (2022). World Economic Outlook: Countering the Cost-of-Living Crisis, Chapter 1: Global Prosperity. Washington, D.C.: International Monetary Fund, Publication Services. ISBN 979-8-40022-128-6.
    27. IMF (2023). Inflation and disinflation: What role for fiscal policy. In: Fiscal Monitor: On the Path to Policy Normalization, pp. 25-47. Washington, D.C.: International Monetary Fund.
    28. Koenker, R., Xiao, Z. (2004). Unit root quantile autoregression inference. Journal of the American Statistical Association, 99(467), 775-787. https://doi.org/10.1198/016214504000001114 Go to original source...
    29. Krugman, P. (2011). Droughts, floods and food. [Retrieved 2024-01-15] Available at: https://www.nytimes.com/2011/02/07/opinion/07krugman.html
    30. Lagi M., Bar-Yam Y., Bertrand K. Z. (2011). The Food Crises: A Quantitative Model of Food Prices Including Speculators and Ethanol Conversion. arXiv, 1109.4859. https://doi.org/10.48550/arXiv.1109.4859 Go to original source...
    31. Lanchovichina E. (2018). Eruptions of Popular Anger: The Economics of the Arab Spring and Its Aftermath. MENA development report, Washington, D.C.: World Bank. ISBN 978-1-4648-1153-1. Go to original source...
    32. Lopez-Acevedo, G., Cong Nguyen, M., Mohammed, N., et al. (2022). How rising inflation in MENA impacts poverty. [Retrieved 2024-01-20] Available at: https://blogs.worldbank.org/arabvoices/how-rising-inflation-mena-impacts-poverty
    33. Marques, C. R. (2004). Inflation Persistence: Facts or Artefacts? ECB Working Paper No. 371.
    34. Mishkin, F. (2007). Inflation Dynamics. International Finance, 10(3), 317-334. https://doi.org/10.1111/j.1468-2362.2007.00205.x Go to original source...
    35. Moriyama, K. (2011). Inflation Inertia in Egypt and its Policy Implications. IMF Working Paper WP/11/160. Go to original source...
    36. Narayan, P. K., Stephan P. (2011). An Application of a New Seasonal Unit Root Test to Inflation. International Review of Economics and Finance, 20(4), 707-716. https://doi.org/10.1016/j.iref.2011.01.001 Go to original source...
    37. Nazlioglu, S., Gürel, S. P., Güneş, S., et al. (2023). Asymmetric persistence in Turkish interest and inflation rates: New evidence from quantile unit root test with structural shifts. International Journal of Finance and Economics, 9(4), 3831-3839. https://doi.org/10.1002/ijfe.2855 Go to original source...
    38. Oloko T. F., Ogbonna A. E., Adedeji A. A., et al. (2021). Oil price shocks and inflation rate persistence: A Fractional Cointegration VAR approach. Economic Analysis and Policy, 70, 259-275. https://doi.org/10.1016/j.eap.2021.02.014 Go to original source...
    39. Perron, P. (1989). The great crash, the oil price shock and the unit root hypothesis. Econometrica, 57(6), 1361-1401. https://doi.org/10.2307/1913712 Go to original source...
    40. Roache, S. K. (2014). Inflation Persistence in Brazil - A Cross-Country Comparison. IMF Working Paper No. 2014/055. https://doi.org/10.5089/9781475585230.001 Go to original source...
    41. Si, D.-K., Li, X.-L. (2017). Mean reversion of inflation rates in seven Eastern European countries: An application of a Fourier quantile unit root test. The Journal of International Trade & Economic Development, 27(2), 145-167. https://doi.org/10.1080/09638199.2017.1350200 Go to original source...
    42. Sheedy, K. D. (2010). Intrinsic inflation persistence. Journal of Monetary Economics, 57(8) 1049-1061. https://doi.org/10.1016/j.jmoneco.2010.10.002 Go to original source...
    43. Soffiantini, G. (2020). Food insecurity and political instability during the Arab Spring. Global Food Security, 26(September). https://doi.org/10.1016/j.gfs.2020.100400 Go to original source...
    44. Stock, J. H., Watson, M. (2007). Why Has U.S. Inflation Become Harder to Forecast? Journal of Money, Credit, and Banking, 39(7), 3-34. Go to original source...
    45. Tsong, C.-C., Lee, C.-F. (2011). Asymmetric Inflation Dynamics: Evidence from Quantile Regression Analysis. Journal of Macroeconomics, 33(4), 668-680. https://doi.org/10.1016/j.jmacro.2011.08.003 Go to original source...
    46. Valera H. G. A., Holmes M. J., Hassan G. M. (2017). How credible is inflation targeting in Asia, a quantile unit root perspective. Economic Modelling, 60, 194-210. https://doi.org/10.1016/j.econmod.2016.09.004 Go to original source...
    47. Watson, M. W. (2014). Inflation Persistence, the NAIRU, and the Great Recession. American Economic Review, 104(5), 31-36. https://doi.org/ 10.1257/aer.104.5.31 Go to original source...
    48. Willis, J. L. (2003). Implications of structural changes in the U.S. economy for pricing behavior and inflation dynamics. Economic Review, First Quarter, 88(QI), 5-27.
    49. Wolters, M. H., Tillmann, P. (2015). The changing dynamics of US inflation persistence: a quantile regression approach. Studies in Nonlinear Dynamics & Econometrics, 19(2), 161-182. Go to original source...
    50. WB Middle East and North Africa Region (2011). A Regional Economic Update. May 2011 MENA Facing Challenges and Opportunities, 63658, Washington, D.C. [Retrieved 2024-03-10.] Available at: https://documents1.worldbank.org/curated/en/353661468052800321/pdf/636580REVISED00Challengestextjuly13.pdf
    51. WB (2023). Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa. [Retrieved 2024-03-14] Available at:https://www.worldbank.org/en/region/mena/publication/middle-east-and-north-africa-economic-update-archiveapril2023
    52. Wu, J.-W., Wu, J.-L., (2018). Does a flexible exchange rate regime increase inflation persistence? Journal of International Money and Finance, 86, 244-263. https://doi.org/10.1016/j.jimonfin.2018.05.002 Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content