Similarity of Development Patterns in Egypt and Turkey

Abstract This study underscores similarity of development patterns and reform policies in Egypt and Turkey. A one-period CGE model for Egypt is used to simulate the effects of an increase in public investment stimulated with and without flexible exchange rate and with fiscal restraint. Structuralist features are introduced to reflect various realities of the Egyptian economic environment including unemployment, non-competitive pricing and rent-seeking activities. The simulation results for Egypt are compared with analogous results for Turkey (Cakmak and Yeldan 1991). In general, the effects of a rise of public investment spending on growth, production, employment and income distribution in both countries are all quite similar. This should encourage joint research to guide development and reform programs, to allow the two countries to learn from experiences of each other. Three important themes are suggested for future joint research: unemployment, macroeconomics and fiscal adjustments and export promotion policy. Arabic Abstract: