Analyzing the Equilibrium State of Government Budget Function Reviewing the Data of Egypt
(1) King Khalid University (KSA) Collage of Business Department of Business
(2)
(3)
(4)
(5)
(*) Corresponding Author
Abstract
The study aims to analyze the budget surplus function using differential equations to evaluate equilibrium values, sensitivity, and stability. To achieve this objective, the study employed various variables representing fiscal and monetary policy tools, as well as mixed policy instruments. Time series data were collected for two distinct periods: the first spanning from 2004 to 2011, and the second covering 2012 to 2021.The results indicate that equilibrium values increased for all variables in the second period compared to the first, with the exception of the exchange rate. Most variables became more influential on the budget surplus in the second period, except for the exchange rate and investment. The stability analysis revealed that the budget surplus function was unstable in both periods, with a slight preference for the first period based on the indicators observed. The study concludes that fiscal policy tools had a relatively stronger impact compared to monetary policy tools in addressing the Egyptian budget surplus during the period from 2004 to 2021.
References
Abd-Elhamid Ali, H., & Abo Elmagd Mohamed, H. (2022). Estimating the Impact of Fiscal Consolidation on Economic Growth in Egypt. The Scientific Journal for Research in Commercial Studies , 36(4), 213-234.
AbdelKhalek, Gouda. (2000). “Domestic Public Debt Accumulation in Egypt: Magnitude, Structure and Consequences”. In Abdel-Khalek, Gouda and Karima Korayem (eds.) Fiscal Policy Measures in Egypt: Public Debt and Food Subsidy. Cairo Papers in Social Science, Volume 23, Number 1, Cairo: AUC Press.
Abdel-Latif, Hany, and Tapas Mishra. "Asymmetric growth impact of fiscal policy: Evidence from Egypt." Available at SSRN 3091610 (2016)
Abed, G. T., & Davoodi, H. R. (2003). *Challenges of Growth and Globalization in the Middle East and North Africa*. International Monetary Fund.
Abu Hasan Md, Islam MdA, Abul Hasnat Md, Abdul Wadud Md (2016) The relative efectiveness of monetary and fscal policies on economic growth in Bangladesh. Economics 5(1):1–7. https://doi.org/10.11648/j.eco.20160501.11
Ahmad, E., & Brosio, G. (2009). *Does decentralization enhance service delivery and poverty reduction?* Edward Elgar Publishing.
Alesina, A., & Perotti, R. (1995). *Fiscal Expansions and Adjustments in OECD Economies*. Economic Policy, 10(21), 205-248.
Ali S, Irum S, Ali A (2008) Whether fscal stance or monetary policy is efective for economic growth in case of South Asian countries? Pak Dev Rev 47(4):791–799. https://doi.org/10.3054/v47i4IIpp.791-799
Alshaib, Bayan Mohamad, et al. "Fiscal Sustainability and Its Implications for Economic Growth in Egypt: An Empirical Analysis." SAGE Open 13.4 (2023): 21582440231215983
Al-Shawarby S., El Mossallamy M. (2019). Monetary-fiscal policies interactions and optimal rules in Egypt. Review of Economics and Political Science, 4(2), 138-157. DOI 10.1108/REPS-03- 2019-0033.
Arezki, R., & Gylfason, T. (2011). *Resource Rents, Democracy, Corruption, and Conflict: Evidence from Sub-Saharan Africa*. Journal of African Economies, 20(4), 578-606.
Aschauer, D. A. (1989). *Does public capital crowd out private capital?*. Journal of Monetary Economics, 24(2), 171-188.
Balassone, F., & Franco, D. (2000). *Public Investment, the Stability Pact and the Golden Rule*. Fiscal Studies, 21(2), 207-229.
Barro, R. J. (1990). *Government spending in a simple model of endogenous growth*. Journal of Political Economy, 98(5), S103-S125.
Bernanke, B. (2016). “Monetary Policy in the Future.” In Progress and Confusion: The State of Macroeconomic Policy, edited by O. Blanchard, R. Rajan, K. Rogoff and L. H. Summers, 129–134. Cambridge, MA: The MIT Press.
Besley, T., & Persson, T. (2013). Pillars of prosperity: The political economics of development clusters. Princeton University Press.
Bird, R. M., & Zolt, E. M. (2005). *Redistribution via taxation: The limited role of the personal income tax in developing countries*. UCLA Law Review, 52(6), 1627-1695.
Central Agency for Public Mobilization and Statistics (CAPMAS). (2022). *Statistical data and economic reports*. Retrieved from [https://www.capmas.gov.eg](https://www.capmas.gov.eg)
Central Bank of Egypt. (2022). *Economic indicators and reports*. Retrieved from [https://www.cbe.org.eg](https://www.cbe.org.eg)
El Husseiny, Israa A. "The relative effectiveness of fiscal and monetary policies in promoting Egypt’s output growth: an empirical investigation using an ARDL approach." Journal of Economic Structures 12.1 (2023): 4.
EL KHATTAB, Y., EL YAMANI, R., & HEFNAOUI, A (2023) . Assessing The Fiscal-Monetary Policy Mix Effectiveness: Evidence from Morocco, Egypt and Saudi Arabia, ERF 29th Annual Conference
El-Khishin, S., & Kassab, D. (2021, October). Monetary-Fiscal Policy Interactions During Uncertainty Shocks: Evidence from Egypt. Economic Research Forum (ERF).
Elmendorf, D. W., & Mankiw, N. G. (1999). *Government debt*. In J. B. Taylor & M. Woodford (Eds.), *Handbook of Macroeconomics* (Vol. 1, pp. 1615-1669). Elsevier.
IMF. (2018). *Fiscal Transparency Handbook*. International Monetary Fund.
IMF. (2022). *World Economic Outlook Database: Egypt Economic Indicators*. Retrieved from [https://www.imf.org](https://www.imf.org)
John F. Due. Homewood (1954). Government Finance: An Economic Analysis. , Canadian Journal of Economics and Political Science. 21(3):399-400. doi:10.2307/138225.
Jones, M. A., & Tommasi, M. (1997). Politics: An Introduction to Modern Democratic Government. University of Michigan Press.
Karara, M., Fayed, M., El Mossallamy, M., & Aly, H. (2023). Interaction between Monetary and Fiscal Policies: Evidence from Egypt. Topics in Middle Eastern & North African Economies: Proceedings of the Middle East Economic Association, 25(1).
Keen, M., & Mansour, M. (2010). *Revenue Mobilization in Sub-Saharan Africa: Challenges from Globalization*. Development Policy Review, 28(5), 553-571.
Lawyer, C.O., Nigeria, P.H. (2013), "Budget preparation and implementation in the Nigerian public sector", Research Journal of finance and accounting, Vol. 4, No. 16, pp. 50-54.
Liao, Chao-Ning, H. Önal and Ming-Hsiang Chen. 2009. Average shadow price and equilibrium price - A case study of tradable pollution permit markets. European Journal of Operational Research, 196:1207-1213.
Liu, L. (2004). The marginal cost of funds and the shadow prices of public sector inputs and outputs. International Tax and Public Finance, 11(1):17–29.
Ndanshau, M. O. (2012). Budget deficits, money supply and inflation in Tanzania: A multivariate granger causality test, 19672010. University of Dar es Salaam working paper(04/12).
Omran, Emad Attia Mohamed, and Yuriy Bilan. "The impact of fiscal policy on the unemployment rate in Egypt." Montenegrin Journal of Economics (2020).
Rahman MdH (2005). Relative efectiveness of monetary and fscal policies on output growth in Bangladesh: a VAR approach. Policy Analysis Unit (PAU), Working Paper No. 0601, Research Department, Bangladesh Bank, Head Ofce, Dhaka, Bangladesh.
Richard K, Muriu P, Maturu B (2018) Relative efectiveness of monetary and fscal policies on output stabilization in devel oping countries: evidence from Rwanda. Int J Econ Financ 10(1):220–232. https://doi.org/10.5539/ijef.v10n1p220
Samuelson. P. A (1954). The Pure Theory of Public Expenditure. The Review of Economics and Statistics, Vol. 36, No. 4. (Nov., 1954), pp. 387-389.
Schembri, L. (2018). “Anchoring Expectations: Canada’s Approach to Price Stability.” Remarks at the Manitoba Association for Business Economists, Winnipeg, Manitoba, February 15.
Shephard, R. W. (1970), Theory of Cost and Production Functions, Princeton University Press.
Shi, M. (2003). Budget systems and expenditure outcomes: Do institutions matter? International Review of Administrative Sciences, 69(3), 363-378.
Shokr. M. A, Zulkefly. A, Shah Zaidi M., (2019). "Monetary policy and macroeconomic responses: non-recursive SVAR study of Egypt," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 11(3), pages 319-337, January.
Ugoh, S.C., Ukpere, W.I. (2009), "Problems and prospects of budgeting and budget implementation in Local Government System in Nigeria", African Journal of Business Management, Vol. 3, No. 12, pp. 836-846.
World Bank. (2003). *Better governance for development in the Middle East and North Africa:
DOI: http://dx.doi.org/10.33019/ijbe.v10i2.1199
Article Metrics
Abstract view : 0 timesRefbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Integrated Journal of Business and Economics is licensed under a Creative Commons Attribution 4.0 International License.
