Nonlinear Autoregressive Distributed Lag Model Research Articles

On the dynamics of exchange rates and inflation expectations

ABSTRACT This study examines the asymmetric relationship between real exchange rate fluctuations and household inflation expectations in India via ARDL and multiple threshold nonlinear autoregressive distributed lag (MTNARDL) models. The results indicate that inflation expectations respond significantly to exchange rate appreciation but are less sensitive to depreciation. A threshold analysis confirms that only substantial exchange rate deviations affect expectations, whereas minor fluctuations have negligible effects. Empirical evidence suggests that an appreciation of the real effective exchange rate by 10 units reduces inflation expectations by approximately 3.2 percentage points, whereas a similar depreciation results in only a 1.4 percentage point increase. These findings challenge the assumption of symmetric exchange rate pass-through and emphasize the importance of exchange rate stability in monetary policy formulation. Given the implications for inflation targeting, policymakers should prioritize exchange rate interventions that minimize excessive appreciation, while also strengthening communication strategies to manage inflation expectations more effectively.

Do Exchange Rates Behave Asymmetrically with Services Trade in India?

ABSTRACT The aim of this article is to examine whether exchange rates behave asymmetrically with services trade in India. Results from the nonlinear autoregressive distributed lag (NARDL) model using quarterly data from 2010 to 2021 demonstrate the asymmetric behavior of exchange rates toward trade in services for both exports and imports. Service exports responded significantly to positive and negative exchange rate shocks in the long run. However, service imports showed an insignificant response to exchange rate shocks in the long and short run. Therefore, it appears that exchange rate behavior in India is more sensitive toward service exports than service imports.

Analyzing the impact of oil imports on air pollution proxied by PM2.5 concentrations in China

PurposeThe impact of oil imports on China’s PM2.5 concentrations has not been the subject of any research. This study aims to fill this gap in the literature. Beyond this contribution, the study also analyzes the influence of miscellaneous factors on PM2.5 concentrations in China for the period 2000–2020.Design/methodology/approachFor this purpose, we employ the autoregressive distributed lag (ARDL), nonlinear autoregressive distributed lag (NARDL) and dynamic conditional correlation (DCC) econometric analysis methods to conduct comprehensive research.FindingsThe analysis results are summarized as follows: (1) The NARDL model shows that oil imports improve air quality by reducing PM2.5 concentrations in China. (2) Population density, economic development and energy intensity are key factors that increase PM2.5 concentrations, with (3) population density having the strongest impact. Finally, (4) the DCC indicates that these variables have time-varying effects.Originality/valueThis study highlights the importance of distinguishing between fossil fuels in terms of air quality in China, allowing us to determine that oil imports contribute to improving air quality, as does natural gas, another non-renewable energy source. As a result, the Chinese Government should reduce population density in vital areas, promote renewable energy sources and restrict the production of fossil resources instead of limiting oil imports.

Does Gender Parity in Higher Education Respond Asymmetrically to Remittances? Evidence from Morocco

Abstract This study examines the dynamic relationship between migrant remittances and gender parity in higher education in Morocco from 1975 to 2023. While existing studies primarily focus on the gendered impact of remittances on primary and secondary education in home countries, the effects on tertiary education remain largely unexplored. Furthermore, these studies often assume a symmetrical impact of remittances, which may not be the case. Using linear ARDL modelling, we demonstrate that remittances have a positive and long-term impact on gender parity in higher education in Morocco. This finding underscores the role of remittances in reducing gender inequality in higher education in Morocco. To explore potential asymmetries, we employed a nonlinear ARDL model, which revealed a short-run asymmetrical impact of remittances on parity in higher education. Our findings are robust to alternative variables and demonstrate the potential of remittances to enhance human development indicators in Morocco. Additionally, remittances serve as an effective tool for achieving sustainable development goals in Morocco.

UNDERSTANDING THE ASYMMETRIC EFFECTS OF EXCHANGE RATE ON ECONOMIC GROWTH: EVIDENCE FROM INDIA

This study examines the short-term and long-term relationships between economic growth, exchange rate fluctuations, money supply, and government expenditure in India from 1980 to 2022. The study employs econometric techniques such as unit root tests, Nonlinear autoregressive distributed lag (NARDL) model, FMOLS & DOLS tests, and the Granger causality test is used to determine the direction of causal relationships. The data utilized in this study were collected from the Handbook of India’s Statistics (RBI) and World Development Indicators (WDI). The unit root tests indicate mixed order of integration for the selected variables. The results of the NARDL model confirm a long-term relationship among economic growth, exchange rate changes, money supply, and government expenditure. The findings indicate that undervaluation negatively affects economic growth in India, whereas overvaluation promotes it. Furthermore, the analysis reveals an asymmetric impact of exchange rate changes on economic growth. The Wald test further supports the presence of asymmetry in both the short-run and long-run. The causality test results show bidirectional causality between exchange rates, government expenditure, and economic growth, while unidirectional causality runs from money supply to economic growth. Based on the empirical findings, some policy implications may be suggested to the government. The exchange rate-controlling organization should emphasize restoring stability and pursue the establishment of a stronger exchange rate to achieve the goal of sustained economic growth and, ultimately, sustainable development

Investigating the Asymmetric Effects of Economic and Demographic Factors on Traffic Accident Severity – Evidence from a Nonlinear ARDL Approach

This study adopts an innovative nonlinear autoregressive distributed lag (N-ARDL) approach and compares it with the standard ARDL and the traditional ordinary least-squared (OLS) regressions. These approaches are used to examine the long-run and dynamic relationships between the accident severity in urban Jordan cities and the following explanatory variables: proportion of population living in urban areas, GDP growth rate, total length of road networks, vehicle ownership growth rate and spaces of newly added buildings. The case study covers the period from 2004 to 2022. The standard and nonlinear ARDL estimates showed the presence of long-run co-integration between variables. Moreover, the NARDL estimates on the long- and short-run indicate a varying effect of the considered explanatory variables on accident severity at the positive and negative partial sum. In general, GDP growth positively affects accident severity in the short run. Whereas, the expansion of road length presents a positive and negative impact on the upward and downward partial sum. In contrast, the explanatory variables differed in their impact on accident severity on each side of asymmetry. The variability of the results obtained by the nonlinear ARDL model helps suggest different policies for different high and low levels of traffic safety.

Exploring asymmetric shocks of carbon emissions to renewable energy sustainability indicators using the NARDL approach

Purpose This study aims to explore the short- and long-run asymmetric link between carbon emission (CE), renewable energy generation (REG), renewable energy capacity (REC), renewable energy investment (REI) and energy demand (ED) to analyze the impact of positive and negative asymmetric shocks of carbon emissions. Design/methodology/approach The nonlinear autoregressive distributed lag (NARDL) model was used to capture the asymmetric effects of the independent variables REG, REC, REI and ED on the dependent variable CE from 1990 to 2024. Findings The findings suggest that all independent variables are associated with the CE in the long run. This relationship confirms that changes in REG, REC, REI and ED significantly impact the CE. The results indicate that positive shocks in renewable energy generation have a stronger impact on emission reduction than negative shocks have on increasing emissions. The short-run asymmetric value of REG is 1.371, which is positive and significant at a 1% level, indicating that changes in REG do not have a stagnant effect on CE. Research limitations/implications Firstly, the analysis focuses on aggregate renewable energy generation and does not differentiate between different types of renewables (e.g. solar, wind, hydro). Future studies could explore the individual effects of different renewable energy sources on emissions and additional variables such as energy prices and government subsidies for the clean energy investment. Practical implications The study has several policy and practical implications. First, policymakers should prioritize expanding renewable energy infrastructure, as the impact of increasing renewable energy generation is more pronounced in reducing emissions than the adverse effects of its reduction. Governments should design policies that encourage sustained investment in renewable energy to ensure long-term emission reductions. Originality/value The annual data on CE, REC, REG, REI and ED from the International Energy Agency and International Renewable Energy Agency for the period of 1990–2024 were used to incorporate carbon emissions during the Paris Agreement and the COVID-19 pandemic.

Asymmetric Impact of Interest Rate on Economic Growth in Kenya

Purpose: This study re-examines the relationship between interest rates and economic growth, focusing on the asymmetric effects of lending interest rates on Kenya's economic performance. Design/Methodology/Approach: The study applied the nonlinear autoregressive distributed lag (NARDL) model to ascertain the distinct impacts of positive and negative interest rate shocks on economic growth in both the short and long run. It uses yearly time series data spanning the years 1980-2021. Findings: The results of the cointegration tests found evidence supporting the existence of an asymmetric long-run relationship, while the Wald test results show that there is a long-run and short-run asymmetry link between interest rates and economic growth in Kenya. On average, positive changes in lending interest rates have no significant impact on economic growth in Kenya, both in the short and long run. However, negative interest rate shocks spur economic growth in the short run but impede growth in the long run. Research Limitations/Implication: The study is limited to the Kenyan context and the dataset range of 1980–2021. Future research could explore thresholds for optimal interest rate levels and include a broader range of countries for comparative analysis. Originality/Value: This study uniquely applies the NARDL framework to Kenya, providing new insights into the asymmetric impact of interest rates on economic growth. Paper Type: Research Paper.

Economic recovery and resilience in post-pandemic Europe: evidence from eleven European Union economies

Abstract This study examines the economic recovery and resilience of eleven European Union member states after the COVID-19 pandemic, using annual data from 1990 to 2022. It applies a multi-method approach, combining the Pooled Mean Group (PMG) estimator, Nonlinear Autoregressive Distributed Lag (NARDL) model, and Common Correlated Effects Estimator to analyze long- and short-run relationships. The findings show that, in the long run, inflation and mobile cellular subscriptions slow growth, while greenhouse gas emissions have a positive effect. Youth unemployment, labor force participation, trade openness, population growth, and foreign direct investment (FDI) do not show significant effects. In the short run, inflation and mobile subscriptions remain negative, while emissions continue to support growth. PMG results confirm that labor force participation, inflation, and mobile subscriptions reduce long-term growth, whereas population growth, trade openness, and emissions contribute positively. The NARDL model finds uneven effects of FDI, inflation, population growth, and trade openness, with short-run imbalances in inflation and trade openness. Causality analysis shows two-way links between inflation, trade openness, youth unemployment, and GDP growth, while one-way effects are observed for greenhouse gas emissions, population growth, and mobile subscriptions. These results help shape post-pandemic economic policies, emphasizing the importance of managing inflation and improving mobile connectivity to support long-term growth.

The asymmetric relationship between state media tone and the Chinese bond market during COVID-19: Evidence from a nonlinear ARDL model

The asymmetric relationship between state media tone and the Chinese bond market during COVID-19: Evidence from a nonlinear ARDL model

Financial Technology and Bank Funding Asymmetric Impact on Nigeria Economic Growth

This study investigates the asymmetric impact of financial technology (FinTech) and total bank funding on economic growth in Nigeria using quarterly data spanning from 2000Q1 to 2023Q2. Amidst rapid technological advancement and financial innovation, understanding how FinTech and bank funding influence economic performance has become increasingly crucial, especially in developing economies. This research employs both the Autoregressive Distributed Lag (ARDL) and Nonlinear ARDL (NARDL) models to assess both the symmetric and asymmetric short- and long-run effects of FinTech and bank funding on Nigeria’s GDP. Stationarity tests and bounds cointegration procedures are used to verify long-run relationships, followed by other diagnostic and stability tests. The NARDL model is employed to capture potential asymmetries on economic growth. The study found a long-run relationship between financial technology (FinTech), total bank funding, and economic growth in Nigeria. Results revealed asymmetric effects of positive changes in FinTech indicators significantly promoting economic growth in both the short and long run. Negative changes in FinTech have weaker effects, indicating that FinTech development contributes more when expanding than when contracting. For bank funding, it was noticed that increase in credit to the private sector and aggregate deposits positively influence growth. Decreases in funding have a stronger negative effect than the positive impact of increases, highlighting vulnerability to credit contraction. Diagnostic tests confirmed that the model is well-specified, stable, and free from serial correlation and heteroskedasticity. This suggests that policy efforts should focus on sustaining and expanding FinTech innovations and maintaining stable credit supply to enhance long-term economic growth in Nigeria.

Asymmetric Impacts of Oil Price Shocks on Iranian Economic Growth

The study examines asymmetrical effects of ups and downs in oil price on Iran's economic growth from 1990 to 2022, which also includes unemployment and inflation as major macroeconomic factors. The nonlinear autoregressive distributed lag (NARDL) model was employed to examine the effects of positive and negative shocks of oil price on the economic growth. Conclusions make a contribution to the literature on the economic implications of oil price fluctuations, especially in oil -dependent economies such as Iran. The results of the unit root tests indicate that variables are integrated of different orders, which justify the use of the NARDL approach. Structural break tests highlight significant economic changes in the period analyzed in Iran, especially for oil prices in 2012 and 2017, for unemployment for 1994 and 1998, and for inflation in 2012 and 2002. Furthermore, the findings confirm the presence of long -term relationship between oil price fluctuations and economic growth. The results for short -term estimation suggest that a positive oil price shock adversely affects economic growth, while the negative oil price shock has an insignificant effect. Unemployment plays an important role, with positive shock in unemployment showing a strong negative effect on economic growth. Inflation pressure, both positively and negatively, has a small effect. Long -lasting results confirm the asymmetrical effects of oil price movements, a shock of positive oil price adversely affects the GDP growth, while negative oil price shows an insignificant effect.

(A)symmetric effects of climate changes on food and crop production in Pakistan

Abstract Over the last few decades, every single economic sector in the world has been in danger as a result of climate change; however, the agricultural sector is particularly susceptible to the effects of climate change due to its high degree of dependence. Pakistan's agricultural and food productivity, and rural livelihoods, have all suffered significant setbacks over the past few decades as a direct result of factors related to global and regional climate dynamics. Therefore, this study aims to examine the symmetric and (a)symmetric effects of climatic changes on food and crop production in Pakistan. For empirical analysis, this study utilized the linear and non-linear ARDL approaches by using the annual time series data over the period 1960–2020. The findings of the linear ARDL model reveal that temperature adversely affects food production, while precipitation enhances the total production of food in Pakistan. The findings of the non-linear ARDL model indicate that the effects of temperature are quite asymmetric as both positive and negative changes to temperature damage food production with different intensities. Further, asymmetric effects are found for changes in precipitation as negative changes adversely affect food production; whereas positive changes in precipitation boost it. Similarly, maximum temperature poses adverse effects on food production, whereas maximum precipitation enhances it. The average change, as well as the positive temperature change, adversely affects crop production, whereas average precipitation and minimum precipitation assert favorable effects on crop production. The results also indicate that natural disasters have detrimental effects. Contrary to this, the duration of sunshine boosts both food and crop production during the examined period. Based on the findings of the study, it is recommended that climate-vulnerable crops should be identified, and region-specific adaptive measures be implemented. Additionally, climate-resilient and short-duration crops should be promoted, and investments should be made in crop biotechnology to improve yields and resistance to extreme temperatures.

Unveiling the dynamic connection: ICT, technological innovation, financial inclusion, natural resources, and environmental degradation in MENA countries: evidence from CS-ARDl and NARDL

Rapid urbanization, economic dependency on natural resources, and ecological damage are major obstacles to environmental sustainability in the Middle East and North Africa (MENA). This paper examines the dynamic interactions among Information and Communication Technology (ICT), technical innovation, financial inclusion, natural resource rent, and environmental sustainability using ecological footprints and load capacity factors as main indicators. The research finds linear and asymmetric correlations using panel data from 2001 to 2022 and sophisticated econometric approaches like Cross-sectionally Autoregressive Distributed Lag (CS-ARDL) and Nonlinear ARDL (NARDL) models. The results expose that by encouraging energy efficiency and sustainable resource use, ICT and technical innovation significantly help to reduce environmental damage. Financial inclusion, however, has two different effects: if not properly controlled, it may encourage unsustainable spending habits even while it helps to provide cash for green ventures. Moreover, natural resource rents greatly worsen environmental damage, supporting the resource curse theory, especially in areas with inadequate government systems. The asymmetry approach emphasizes the varied impacts of positive and negative shocks in ICT and technological innovation on sustainability, thus implying the need for customized policy responses. With a comprehensive view of sustainability in MENA and strong econometric modeling incorporating environmental, technical, and financial components, this paper adds to the body of knowledge. Emphasizing the requirement of legislative frameworks that support green funding, improve institutional quality, and stimulate the use of digital and clean technology, the findings provide policymakers with practical insights. Aligning economic resilience with environmental sustainability would depend mostly on strengthening governance and sustainable investment policies, guaranteeing long-term ecological and economic stability.

Macroeconomic Information Sentiment Biases in Derivatives Market: Asymmetry Evidence in Case of India

This research attempts to scrutinize the dynamic nexus between the aggregate derivatives market trading activity/volume and the macroeconomic information. We track the nonlinear impact of money supply, interest rates and gold prices along with the stock index, volatility indices and economic policy uncertainty index on India’s NSE derivative market and its sub-segments trading activity using a nonlinear autoregressive distributed lag model. This article makes contributions by filling the deficit in the available literature with reference to the understanding of the nexus of derivatives trading activity and macroeconomic information. First, we found evidence of the long-run equilibrium cointegration between money supply, gold prices, interest rates and aggregate derivatives market trading activity. Second, we found that derivatives market segments vary in macroeconomic variable sensitivity. Third, identifying macroeconomic variable-induced long- and short-term asymmetry across segments. Recognizing the asymmetrical relationship between macroeconomic information and derivatives trading activity helps investors formulate trading strategies and policymakers mitigate stock market volatility through proactive policy adjustments. Key Takeaways Evidence of the long-run equilibrium cointegration between money supply, gold prices, interest rates and aggregate derivatives market trading activity. Derivative market segments vary in macroeconomic variable sensitivity. Identifying macroeconomic variables-induced long- and short-term asymmetry across segments.

Climate change and rice production in Sri Lanka: short-run vs. long-run symmetric and asymmetric effects

This study explores climate change's symmetric and asymmetric impacts on rice production in Sri Lanka, a crucial sector for food security in the country. The analysis utilized Autoregressive Distributed Lag (ARDL) and Non-linear Autoregressive Distributed Lag (NARDL) models. This study analyses annual data from 1952 to 2022 to capture relationships among the study variables. The ARDL findings reveal that temperature and cultivated land area have a significant long-term effect on rice production. The NARDL model reveals that positive and negative changes in climate variables have asymmetrical long-term impacts. Positive changes in temperature and rainfall lead to a notable decline in rice yields in the long term. Negative rainfall changes create a significant beneficial effect on rice production in the long term. Cultivated land area shows a significant positive impact on rice yield in the long term. The results of symmetric and asymmetric climate change impact are essential for formulating agricultural climate adaptation policies, such as promoting climate resilience rice varieties, improving irrigation and water management, developing early warning systems that promote sustainability and enhance climate adaptation strategies, ensuring food security in Sri Lanka.

Asymmetric Effects of Foreign Worker Employment on Sectoral Labor Productivity: A Malaysian Perspective

This study examines the asymmetric effects of foreign worker employment and low educational attainment on labor productivity across Malaysia’s three main economic sectors—agriculture, industry, and services—from 1991 to 2019 using the nonlinear autoregressive distributed lag (NARDL) model. Three sectoral models are estimated to capture how overdependence on foreign workers and low-skilled local labor influences productivity. Model 1 for agriculture underscores positive variations vis-à-vis how foreign worker employment boosts agricultural productivity in both the short and long term. However, negative variations lead to diminished productivity in the long run. Primary education negatively affects long-term agricultural productivity. In Model 2 for industry, neither foreign worker employment nor low educational attainment significantly affects productivity. Model 3 for services reveals a short-term boost in productivity with increased foreign workers’ employment, whereas reduced employment enhances long-term productivity. The absence of formal education is detrimental to long-term service productivity, while primary education affects it negatively in the short term. NARDL multiplier graphs and Wald tests confirm significant long-run asymmetric effects of foreign labor in the agriculture and services sectors. The findings highlight the need for Malaysia to reduce reliance on low-skilled labor and accelerate its transition toward a high-skilled workforce to sustain productivity growth and economic competitiveness.

The impact of climate change on financial stability: evidence from Maldives

Purpose This study aims to examine the impact of climate risk on financial stability in the Maldives, focusing on banking stability, credit availability and tourism revenue. Design/methodology/approach This study uses the nonlinear autoregressive distributed lag (NARDL) model to analyze the asymmetric effects of climate risk on financial stability in the Maldives. Climate risk is measured via temperature variations and government relief spending, while financial stability is assessed using Z-score, non-performing loans (NPLs), credit availability and tourism revenue. Quarterly data (2012Q1–2024Q1) is analyzed, with cointegration tests, asymmetry analysis and robustness checks using the state-space model (Kalman filter) to distinguish climate-driven fiscal responses. Findings This study reveals asymmetric effects of climate risk on financial stability in the Maldives. Temperature levels do not directly impact financial stability, but government relief spending during disasters increases banking risks (lower Z-score), reduces credit availability and disrupts tourism revenue. However, reduced relief spending does not improve financial stability, highlighting fiscal policy asymmetries. NPLs remain largely unaffected by climate risk. The banking sector is more vulnerable to economic downturns than it benefits from growth. These findings underscore the need for targeted fiscal strategies and financial resilience measures to mitigate climate-related financial instability in small island economies. Originality/value This study provides a novel perspective on climate risk and financial stability by focusing on the Maldives, one of the world’s most climate-vulnerable economies. Unlike prior research that broadly examines macroeconomic impacts, this study uniquely measures government relief spending as a proxy for climate risk response. By applying the NARDL model, it captures asymmetric effects of climate shocks on banking stability, credit availability and tourism revenue. The findings offer policy-relevant insights for small island nations, emphasizing the need for adaptive fiscal strategies to mitigate financial instability caused by climate-related disasters.

The Impact of Remittances on Climate Change: Empirical Evidence from Nepal

The existing literature has studied the impact of remittance inflow on climate change for several developing countries. However, the existing literature has not adequately addressed how different levels of remittances asymmetrically affect climate change. In this study, we address this research gap using the multiple threshold non-linear autoregressive distributed lag approach. Our study demonstrates how minor, moderate and major changes in remittances influence climate change differently. Our analysis, based on time-series data for Nepal, reveals that minor, moderate and major changes in remittances have an asymmetric impact on climate change. In the long run, a minor rise in the inflow of remittances has a significant negative effect on climate change, a moderate rise has a large positive effect and a major rise has a positive effect, although smaller than that of a moderate rise. Thus, we observe an inverted ‘U’-shaped relationship between remittances and climate change. Additionally, we present a new conceptual framework to discuss this phenomenon. Prior studies have employed the non-linear autoregressive distributed lag (NARDL) model to examine this topic, but such analysis is absent in the Nepalese context. Therefore, we also apply the NARDL model to assess how positive and negative shocks in remittances influence climate change. Our findings confirm the asymmetric effect of remittances on climate change under the NARDL framework as well. JEL Codes: C32, F24, Q54, Q56

Determinants of gross international reserves in the case of the Maldives

Purpose This study aims to examine the determinants influencing gross international reserves of the Maldives. Design/methodology/approach This paper uses annual data from 1990 to 2023 and adopts a nonlinear ARDL model for identifying the key determinants of gross international reserves in case of Maldives. Findings The authors ascertain that a one standard deviation rise in positive and negative export volatility, short-term debt, per capita income, money supply and interest rates results in an increase in foreign reserves. The most substantial effect arises from shocks to the negative component of export volatility, increasing reserves by 13.85% of the average, followed by per capita income shocks (10.9%) and positive export volatility shocks (10.12%). Interest rates exert a minimal impact, augmenting reserves by merely 0.78%. Conversely, import and exchange rate volatility positively impact reserves, with positive exchange rate volatility reducing reserves by 17.80%, and import volatility decreasing them by 15.72% (positive) and 11.09% (negative). Practical implications A key policy message emanating from the aforementioned results is the necessity to mitigate export volatility, particularly the negative component. If successful, this can facilitate the acquisition of reserve reserves. The finding regarding the function of debt suggests that a strategic approach and establishment of multilateral borrowing arrangements will facilitate the preservation of robust reserves. Economic growth and money supply are essential for reserve expansion. Policies that incentivize and promote growth, particularly private sector investments that enhance growth and increase money supply, can fortify reserves; nevertheless, these policies must be carefully designed because failure to optimally design such policies can be costly. In other words, an increase in growth and money supply when boosted can trigger inflationary pressures. The results warn that policies to stabilize the exchange rate and import volatility should not be taken lightly as they are important factors in protecting reserves from external shocks. The data, due to its limited sample size—which should be considered a caveat, indicates a relatively trivial role for interest rates; yet, it is advisable not to disregard this factor. Reserve stability can be supported by not ignoring interest rate. Originality/value This study investigate the factors affecting international reserves in the Maldives, a small island economy heavily dependent on tourism, hence enhancing comprehension of policy focus for accumulating foreign reserves. Islamic and Middle Eastern economies should manage export volatility, and stabilize reserves via sukuk, and balance growth policies to control inflation and liquidity.