A macroeconomic analysis of the fiscal system in Egypt

dc.contributor.authorGlomm, Gerhard
dc.contributor.authorJung, Juergen
dc.contributor.departmentTowson University. Department of Economicsen_US
dc.date.accessioned2018-05-15T20:44:14Z
dc.date.available2018-05-15T20:44:14Z
dc.date.issued2010-10-27
dc.description.abstractWe construct a dynamic general equilibrium model to analyze the fiscal situ- ation of Egypt. We model Egypt as a small open economy that takes real interest rates and world prices of fuel as given. Since a large component of the government budget consists of pensions payments, we use an overlapping generations struc- ture. The model contains descriptions of the public and private sector, as well as descriptions of the production sectors for a public good such as infrastructure, energy, and a final aggregate consumption good. The model pays special atten- tion to the energy sector. We then calibrate the model to data from Egypt. The following policy reforms are considered: (i) reductions in pensions to public sector workers, (ii) reductions in pensions to private sector workers, (iii) reductions in the public sector pay premiums, (iv) decreases of the energy subsidies, and (v) a decrease of the public sector workforce. In each case we reduce the “expenditure” by 15 percent. For each of the reforms we adjust consumption taxes, labor taxes, “capital taxes”, or public investments in infrastructure to satisfy the government budget constraint. We calculate the new steady states, the transition paths to the new steady states, and the size of the welfare gains or losses for all reforms. We find that due to the modest nature of the reforms, the effect of the policy reforms on GDP and consumption are modest. Often these gains are in the neighborhood of 1 percent. We find that welfare gains or losses can be sizeable and that the largest gains from the reforms are attained when the freed up resources are used for infrastructure investments or for lowering the tax on company profits.en_US
dc.description.urihttps://ideas.repec.org/p/tow/wpaper/2010-17.htmlen_US
dc.formatapplication/pdf
dc.format.extent43 pagesen_US
dc.genreworking papersen_US
dc.identifierdoi:10.13016/M28S4JS2G
dc.identifier.citationGerhard Glomm & Juergen Jung, 2010. "A Macroeconomic Analysis of the Fiscal System in Egypt," Working Papers 2010-17, Towson University, Department of Economics, revised Oct 2010.en_US
dc.identifier.otherJEL: E21
dc.identifier.otherJEL: E63
dc.identifier.otherJEL: H55
dc.identifier.otherJEL: J26
dc.identifier.otherJEL: J45
dc.identifier.urihttp://hdl.handle.net/11603/10753
dc.language.isoen_USen_US
dc.publisherTowson University. Department of Economicsen_US
dc.relation.isAvailableAtTowson University
dc.relation.ispartofseriesTowson University Department of Economics Working Paper Series;2010-17
dc.subjectFiscal policy reformen_US
dc.subjectPublic sector reformen_US
dc.subjectEnergy subsidiesen_US
dc.subjectEconomic development -- Egypten_US
dc.titleA macroeconomic analysis of the fiscal system in Egypten_US
dc.typeTexten_US

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