The impact of economic and political instability in economic growth In Yemen during the period 1990-2017

Abstract

Political and economic stability is one of the most important pillars of growth and prosperity and a basic requirement for all countries, regardless of their political system, as instability creates an inappropriate environment for economic and social development, foremost of which is the weakness and deterioration of economic growth rates. The research aims to study the impact of economic and political instability on economic growth in Yemen during the period (1990-2017). However, the research problem is focused on determining the extent to which economic and political instability contributes to economic growth, and then the hypothesis is that this instability leads to a deterioration of economic growth. The research reached several results, the most important of which is the negative growth of the local product during the period under study, the high rates of inflation, deficits of the general budget, balance of payments and political instability, and that the origin of instability is due to many internal and external political and economic reasons. In general, the standard estimates indicated that the variable of the public budget deficit was more influential in economic growth, while political stability came second, then the balance of payments deficit was the weaker effect of inflation. The research recommended the use of monetary and financial policy interventions to achieve economic stability, and the necessity of reforming the structure of the political system, building a civil state, the peaceful transfer of power, and excluding social marginalization, Panel Data Methodology.