Selim, HodaHerrera, SantiagoYoussef, HodaZaki, Chahir2012-03-192012-03-192010-10-01https://hdl.handle.net/10986/3934The paper analyzes the impact of the recent global crisis in the context of the previous two decades' growth and capital flows. Growth decomposition exercises show that Egyptian growth is driven mostly by capital accumulation. To estimate the share of labor in national income, the analysis adjusts the national accounts statistics to include the compensation of self-employed and non-paid family workers. Still, the share of labor, about 30 percent, is significantly lower than previously estimated. The authors estimate the output costs of the current crisis by comparing the output trajectory that would have prevailed without the crisis with the observed and revised gross domestic product projections for the medium term. The fall in private investment was the main driver of the output cost. Even if private investment recovers its pre-crisis levels, there is a permanent loss in gross domestic product per capita of about 2 percent with respect to the scenario without the crisis. The paper shows how the shock to investment is magnified due to the capital-intensive nature of the Egyptian economy: if the economy had the traditionally-used share of labor in income (40 percent), the output loss would have been reduced by half.CC BY 3.0 IGOACCESS TO FINANCEACCOUNTINGAGGREGATE DEMANDAGRICULTUREBALANCE OF PAYMENTSBALANCE SHEETSBANK HOLDINGSBANK POLICYBANK PORTFOLIOSBANKING SECTORBASIS POINTSBENCHMARKBONDSBOOM-BUST CYCLEBOOM-BUST CYCLESBUDGET DEFICITBUSINESS CYCLEBUSINESS CYCLESCAPITAL ACCUMULATIONCAPITAL FLOWSCAPITAL INFLOWCAPITAL INFLOWSCAPITAL INVESTMENTCAPITAL MARKETSCAPITAL OUTFLOWCAPITAL OUTFLOWSCAPITAL SHARECAPITAL SHARESCAPITAL STOCKCAPITAL STOCKSCENTRAL BANKCOMMERCIAL BANKSCOMMODITY PRICESCONSUMER PROTECTIONCONSUMPTION SMOOTHINGCORRUPTIONCURRENCYCURRENCY ASSETSCURRENT ACCOUNT DEFICITDEBTDEBT HOLDINGSDEBT RATIODEBT RATIOSDEBT REDUCTIONDEBT SERVICEDEBT SERVICINGDEFICIT FINANCINGDEFICITSDEMAND FOR CREDITDEPOSITDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDOMESTIC CREDITDOMESTIC DEBTDOMESTIC DEBT MARKETSECONOMETRIC ANALYSISECONOMETRICSECONOMIC DEVELOPMENTECONOMIC GROWTHECONOMIC OUTLOOKECONOMIC PERFORMANCEECONOMIC REFORMECONOMIC REFORMSECONOMIC RESEARCHECONOMIC SECTORSECONOMIC VALUEELASTICITYELASTICITY OF DEMANDEMERGING ECONOMIESEMERGING MARKETEMERGING MARKETSEXCESS LIQUIDITYEXCHANGE RATEEXPENDITUREEXPENDITURESEXPORT GROWTHEXPORTEREXPORTSEXTERNAL CAPITALEXTERNAL DEBTFEDERAL RESERVEFEDERAL RESERVE BANKFINANCIAL CRISESFINANCIAL CRISISFINANCIAL DEVELOPMENTFINANCIAL FLOWSFINANCIAL INTERMEDIATIONFINANCIAL REFORMSFINANCIAL SECTORFINANCIAL STRESSFINANCIAL SYSTEMFISCAL DEFICITFISCAL DEFICITSFISCAL DISCIPLINEFISCAL POLICYFIXED CAPITALFORECASTSFOREIGN CURRENCYFOREIGN DIRECT INVESTMENTFOREIGN EXCHANGEFOREIGN EXCHANGE MARKETFREE TRADEGDPGDP PER CAPITAGLOBAL ECONOMYGLOBAL FINANCIAL STABILITYGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROSS DOMESTIC PRODUCT PER CAPITAGROSS FIXED CAPITAL FORMATIONGROWTH MODELSGROWTH RATEHOLDINGSHOLDINGS OF GOVERNMENT SECURITIESHOUSEHOLD INCOMEHUMAN CAPITALHUMAN DEVELOPMENTINCOME LEVELSINDEBTEDNESSINFLATIONINFLATIONARY PRESSURESINSURANCEINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL FINANCEINTERNATIONAL STANDARDSINTERNATIONAL TRADEINVENTORIESINVESTMENT CAPITALINVESTMENT CLIMATEINVESTOR BASEJOB CREATIONLABOR MARKETLACK OF ACCESSLACK OF COMPETITIONLENDING INTEREST RATELEVEL OF INTEREST RATESLIMITED ACCESSLIQUIDITYLOCAL CURRENCYLONG TERM CAPITALLONG-TERM COSTM2MACROECONOMICSMARGINAL PRODUCTMARGINAL PRODUCTIVITYMARKET CONCENTRATIONMARKET DETERMINATIONMARKETABLE DEBTMARKETABLE SECURITIESMATURITIESMIDDLE INCOME COUNTRIESMONETARY FUNDNATIONAL INCOMENATIONAL SAVINGSNET EXPORTSOUTPUT LOSSOUTPUT LOSSESPHYSICAL CAPITALPOLICY RESPONSESPOLITICAL ECONOMYPORTFOLIOPRIVATE CAPITALPRIVATE INVESTMENTPRIVATE INVESTMENTSPRIVATE SECTOR CREDITPRODUCTION COSTSPRODUCTION FUNCTIONPRODUCTIVITY GROWTHPUBLIC BANKSPUBLIC DEBTPUBLIC DEBT MANAGEMENTPUBLIC FINANCESPUBLIC INVESTMENTPUBLIC SECTOR DEBTPUBLIC SPENDINGPURCHASING POWERRATE OF RETURNRATES OF RETURNREAL EXCHANGE RATEREAL GDPREAL INTERESTREAL INTEREST RATESRECESSIONRECESSIONSREMITTANCESRESERVERESERVE REQUIREMENTRESERVE REQUIREMENTSRESERVESRETURNSRISK AVERSIONSAFETY NETSSAVINGSSAVINGS RATESAVINGS RATESSOCIAL WELFARESTOCK MARKETSTOCKSSTRUCTURAL CHANGET-BILLT-BILLST-BONDSTAXTAX EXEMPTIONSTAX RATESTAXATIONTOTAL FACTOR PRODUCTIVITYTOTAL FACTOR PRODUCTIVITY GROWTHTRADE BALANCETRADE LIBERALIZATIONTRADE POLICYTRADINGTROUGHUNDERESTIMATESUNEMPLOYMENTUNEMPLOYMENT RATEUNEMPLOYMENT RATESVALUE ADDEDVARIABLE RATEWAGESWELFARE BENEFITSWorld Bank10.1596/1813-9450-5451