Financial sector development, economic growth and demography in MENA region.

Summary This thesis studies the impact of financial markets on economic growth in the MENA region. The first chapter presents the economic, demographic, and financial situation in the region. The second chapter presents a nested-generation general equilibrium model that links economic growth, financial markets, and demographic change. The model is calibrated and simulated for three countries in the region with different demographic trends. The results show that a more efficient financial sector leads to better economic performance and higher employment rates. Moreover, young people are the primary beneficiaries of financial sector reform. The third chapter empirically tests the impact of the financial sector on the real sector and growth in 15 MENA countries and finds a negative impact of financial sector development on growth. These results highlight the inefficiency of the financial sector in the region and the urgent need to target policies that improve the efficiency of the sector, not just its size. In the fourth chapter, a financial market development indicator is constructed for countries in the region. This indicator is based on the three pillars of the macroeconomic environment, financial institutions, and financial markets. It takes into account the specificities of the MENA countries and allows ranking the countries of the region according to their performance in the financial sector.