Saving and growth in Egypt
AbstractThis study illustrates the mechanisms linking national saving and economic growth, with the purpose of understanding the possibilities and limits of a saving-based growth agenda in the context of the Egyptian economy. This is done through a simple theoretical model, calibrated to fit the Egyptian economy, and simulated to explore different potential scenarios. The main conclusion is that if the Egyptian economy does not experience progress in productivity -- stemming from technological innovation, improved public management, and private-sector reforms -- then a high rate of economic growth is not feasible at current rates of national saving and would require a saving effort that is highly unrealistic. For instance, financing a constant 4 percent growth rate of gross domestic product per capita with no improvement in total factor productivity would require a national saving rate of around 50 percent in the first decade and 80 percent in 25 years. However, if productivity rises, sustaining and improving high rates of economic growth becomes viable. Following the previous example, a 2 percent growth rate of total factor productivity would allow a 4 percent growth rate of gross domestic product per capita with national saving rate in the realistic range of 20-25 percent of gross domestic product.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5529.
Date of creation: 01 Jan 2011
Date of revision:
Economic Growth; Access to Finance; Economic Theory&Research; Emerging Markets; Achieving Shared Growth;
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- Herrera, Santiago & Youssef, Hoda & Youssef, Hoda & Zaki, Chahir, 2010. "Egypt beyond the crisis : medium-term challenges for sustained growth," Policy Research Working Paper Series 5451, The World Bank.
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- Hevia, Constantino & Loayza, Norman, 2013. "Saving and growth in Sri Lanka," Policy Research Working Paper Series 6300, The World Bank.
- Tsermenidis, Konstantinos, 2014. "Προσδιοριστικοί Παράγοντες Της Εθνικής Αποταμίευσης Κατά Την Περίοδο 1990-2010 Και Μέτρα Ενίσχυσης Της Οικονομι," MPRA Paper 56773, University Library of Munich, Germany.
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