Multiple Trade Shocks and Partial Liberalization: Dutch Disease and the Egyptian Economy

Abstract The multiple external shocks experienced by the Egyptian economy are analyzed using a series of conterfactuals for income, consumption, savings, investment, wages and prices. The public sector's use of the windfall (equivalent to $53 billion in net present value terms) was misguided, with little public savings and a variety of policies that forced adjustment into parallel markets. Meanwhile, the private sector consumed and invested as well as exploited opportunities for rent-seeking that were created by the government's control regime. However, the private sector also accumulated assets abroad which served to shift the boom intertemporally and which could provide a source of investment financing in the future. Arabic Abstract: