Many countries adopted various measures to restrict volatile international short-term flows. In this paper, we investigate the time-varying behavior of HM in selected MENA countries and the effect of HM on their business cycles. Using time-series and panel regression methodologies, this paper examines the following research question: 1) Does hot money (HM) in MENA countries change over time? What are the macroeconomic variables that cause the variation in HM inflows? 2) What are the effects of HM inflows on the business cycles of MENA countries? 3) Do the reactions of business cycles to HM inflows differ among MENA countries? 4) How important are HM inflows for business cycle variation? We conclude that HM differ significantly in time and also among MENA countries. HM has significant effect on most of the MENA countries and we identify some of the determinants of HM inflows.