Saving And Growth In Egypt
This 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% growth rate of GDP per capita with no TFP improvement would require a national saving rate of around 50% in the first decade and 80% in 25 years! However, if productivity rises, sustaining and improving high rates of economic growth becomes viable. Following the previous example, a 2% growth rate of TFP would allow a 4% growth rate of GDP per capita with national saving rate in the realistic range of 20–25% of GDP.
Volume (Year): 04 (2012)
Issue (Month): 01 ()
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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.
- Orazio P. Attanasio & Lucio Picci & Antonello E. Scorcu, 2000. "Saving, Growth, and Investment: A Macroeconomic Analysis Using a Panel of Countries," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 182-211, May.
- Douglas Gollin, 2002.
"Getting Income Shares Right,"
Journal of Political Economy,
University of Chicago Press, vol. 110(2), pages 458-474, April.
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