Dissertation of master course in economic sciences
December 2013
Abstract
Globalization means the rapid increase in the volume of international exchanges of goods, services and financial assets. The purpose of this research is to investigate the impact of economic globalization on inflation in selected countries of the Middle East and North Africa. From a theoretical point of view about the impact of economic globalization on inflation. Four main channels are mentioned. The first channel is the impact of the globalization process on the motivation of monetary authorities to resort to expansionary policies. The second channel is the impact of globalization on relative prices, which is reflected in the relative price changes of imported goods. The third channel is the effect of globalization on the slope of the Phillips curve. The fourth channel is the effect of the production gap of foreign countries on domestic inflation through globalization and trade.
In the present study, using the relatively new global composite index of KOF According to the maximum available data and the econometric method of panel data, the effect of economic globalization on inflation in 14 selected countries of the Middle East and North Africa has been estimated in the period of 2000-2010. The obtained results show that economic globalization has not been able to have a negative effect on inflation in the studied countries. Chapter 1 - Introduction and generalities of the research (1-1 Introduction) Analyzing inflation and predicting its evolution is always one of the most important concerns in different societies and among governments and nations. Inflation is a phenomenon. It is very complex and its level and causes differ from one country to another and as a result there are many different causes and factors. Monetary and financial policies, foreign exchange policies and the economic-social structures of societies are among the most important factors The average inflation rate in industrialized countries has decreased significantly during this decade (Tyebnia and Zandieh, 2008). Various reasons have been proposed by analysts, the most important of which is the effect of the country's inflation. Due to the importance and impact of globalization on inflation and the importance of the inflation index in all countries, in this research, an attempt is made to address the impact of economic globalization on inflation in selected countries of the Middle East and North Africa. 1-2) Statement of the problem. Inflation is one of the factors affecting the unequal distribution of income and wealth, uncertainty in the economy, reduction of investment and economic growth. Therefore, knowing the factors affecting inflation provides an important basis for sustainable growth and development. In recent years, economists have paid much attention to the effects of globalization on various aspects of economic life, among the effects that globalization can have on the economy of countries is its effect on inflation. Many countries have been able to reduce their inflation rates in the process of globalization. For example, the country of Poland, which had an inflation rate of 150% in the late 1990s, after joining the World Trade Organization, was able to bring its inflation rate down to a single digit and drastically reduce it (Salmanpour 88).
The global economy includes increasing internationalization, the effects of which can be seen in the increase of international trade, the globalization of production and the flow of foreign direct investment (Fattahi, 2013).
The economic globalization of a country improves world trade, the open economy grows faster than the closed economy by influencing the improvement of technology (Sashida [1], 2003).Globalization can affect domestic prices by creating a competitive environment for producers, increasing productivity and reducing wage pressures, especially for industrialized countries (Salman Pour, 2018). Globalization in different ways may affect the inflation of countries. On the one hand, the opening of the economies can have an impact on the functioning of the monetary authorities of the countries. On the other hand, the integration of emerging economies such as China and India and the penetration of the production of these countries into the global markets have exposed the producers of other countries to intense price competition, which can prevent them from raising prices. Also, the relative price reduction of imported goods and services may directly reduce the intensity of the increase in the general level of prices (Fattahi, 2013). The proposed research examines the impact of economic globalization on inflation in selected countries of the Middle East and North Africa region. The innovation of this research is that it examines the impact of economic globalization on inflation in selected countries of the Middle East and North Africa region[2] using a relatively new and combined KOF index[3].
1-3) Research limitations The time range is from 2000 to 2010 (according to the extent of most available data). Also, the research area includes selected countries in the Middle East and North Africa region. 1-4) Research questions and hypotheses.
The most important question of the current research is:
Does economic globalization have a negative and meaningful effect on the inflation of selected countries in the Middle East and North Africa region?
And the most important hypothesis of the current research is: Economic globalization has a negative and significant effect on the inflation of selected countries in the Middle East and North Africa region.
A) Getting to know the concept of the economic dimension of globalization.
B) Investigating the trend of economic globalization in the countries in question.
C) Getting to know the inflation trend in the countries in question.
D) The impact of economic globalization on inflation in selected countries in the Middle East and North Africa region.
(6-1 research method
To test the hypothesis, panel data econometric method is used.
The following model is used to investigate the effect of economic globalization variables on inflation.
(1-1) Yi t = α + βXit + γ uit
Yi t:inflation rate
Xit: Vector of independent and explanatory variables such as money volume, government spending and . which enters the template.
Zit: A subset of the variables desired by the researcher, which here is the economic dimension of globalization.
: uit Except for disturbance
i,t represent the time and country of the statistical data, respectively.
7-1) Research organization
The proposed research is written in five chapters. In the first chapter, the introduction and generalities of the research are stated. In the second chapter, the literature of the subject is expressed theoretically and empirically. The third chapter is dedicated to stating the research method. In the fourth chapter, research hypotheses are tested. The results of the research will be stated in the fifth chapter. became.