Granger Causality and the Factors underlying the Role of Younger Generations in Economic, Social and Political Changes in Arab Countries

By Ahmed Driouchi and Tahar Harkat, Institute of Economic Analysis & Prospective Studies (IEAPS), Al Akhawayn University, Ifrane, Morocco

http://d.repec.org/n?u=RePEc:pra:mprapa:77218&r=ara

The youngest segments of the population are considered as the main engine of economic, social, and political change. Recent literature underlines the roles of youth in Arab countries and their contributions in conducting major changes. Thus, understanding the characteristics of the current young Arab generation are of prime importance. The latest contributions highlight major differences between new generations and their parents as they are influenced by the Information Technologies (IT), social networks, education attainment and knowledge economy.

The current research is a follow-up to the one focusing on the analytical description of the main variables that are likely to characterize the current era that is surrounding the newest generations (Driouchi & Harkat, 2017; Driouchi & Harkat, 2016, Harkat, Driouchi, & Achehboune, 2016a; Harkat, Driouchi, & Achehboune, 2016b).

This paper explores the causal links between a set of variables in 19 Arab countries (including GCC countries) using Granger Causality tests. This test enables the prediction of the causality between the variables in a sense that if x causes y, if x is able to increase the accurateness of the prediction and forecast of y using time series data that account for demographic, social, technological, and economic variables. The test is conducted for each Arab country separately.

Findings indicate that simpler models are obtained for GCC countries meaning that only few variables appear to be determining the behavior of the new generations. This means that sector policies would easily help in adjusting the welfare of new generations. More complex ones are for the non-GCC countries. This is explained by the difference in terms of the level of development between GCC and non-GCC economies implying that policies need to target more sectors to achieve the desirable outcomes. Even if each of the Arab economies has a unique model, policies should be oriented mostly towards the reduction of unemployment among youth as this latter seems to be the most common driver of both political and social variables, which aligns with the contribution of Harkat, Driouchi and Achehboune (2016a). With regard to other variables, each of the Arab countries should orient its policies towards the main factors that drive changes into their economies.

References:

Driouchi, A. & Harkat, T. (2017). Granger causality and the factors underlying the role of younger generations in economic, social and political changes in Arab countries. MPRA 77218.

Driouchi, A. & Harkat, T. (2017). An empirical descriptive analysis of the factors underlying the role of younger generations in economic, social & political changes in Arab countries. MPRA 77216.

Driouchi, A. & Harkat, T. (2016). Macroeconomic and school variables to reveal country choices of general and vocational education: A cross-country analysis with focus on Arab economies. MPRA 73455.

Harkat, T., Driouchi, A., Achehboune, A. (2016a). Generational gap and youth in Arab countries. MPRA 75834. https://mpra.ub.uni-muenchen.de/75834/1/MPRA_paper_75834.pdf

Harkat, T., Driouchi, A., and Achehboune, A. (2016b). Time series analysis & choices for general and vocational education in Arab economies. MPRA 74770.

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