Money, Prices, and Economic Expansson in the Middle East, 1152—1960 *

This chapter analyses monetary developments in the period 1952 to 1960 in Egypt, Syria, Lebanon, Iraq, Iran and Turkey, examining changes in the supply of money in relation to prices, national income and imports. It investigates some of the variables other than money that are relevant for an analysis of the impact of an increased money supply on prices. Apart from the substantial increase in the money supply, the most striking characteristic of the monetary situation that is brought out in the table and chart is the importance of the private sector in spite of the official emphasis on government investment and long-range development plans in most of the countries. Economic expansion has in fact been proceeding vigorously in the Middle East—but not without its financial troubles. The amount and character of the real expansion can be seen in national income and product accounts where they exist; the financial expansion, and the characteristics thereof, are displayed in the monetary accounts.