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...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110113095021 http://hdl.handle.net/10986/3302 |
| Summary: | 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 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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