What Drives Business Cycles in Egypt? An Analysis of Coincident and Leading Indicators

Nourhan Hegazi, Diaa Noureldin, Chahir Zaki
29/10/2022

The paper proposes a chronology for the Egyptian economy, by detecting phases of expansions and recessions during the period (2002-2019). It examines the cyclical behaviour of variables that are considered potentially useful in measuring or predicting aggregate economic activity. To do so, we combine the National Bureau of Economic Research (NBER) approach, together with time series analysis techniques, to select the variables best suited to play the role of coincident and leading indicators. This methodology is found to be the most appropriate when there is no well-established reference chronology as a benchmark for the cyclical analysis, which is the case of Egypt. As a result, two composite indexes are constructed: 1) The composite index of Coincident Economic Indicators (CEI), which can be considered as an adequate measure for the Egyptian business cycle. 2) The composite index of Leading Economic Indicators (LEI) that showed good performance in anticipating aggregate economic activity in Egypt. Moreover, the empirical results indicate that total employment, consumption and investment moved coincidently with the reference cycle, whilst exchange rate and interest rate variables appeared to lead the reference cycle and showed strong predictive power for economic activity in Egypt.

Analysis of country convergence dynamics: a multi-dimensional approach

Moubarack Lo, Amaye Sy
03/10/2022

Empirical verification of economic convergence between countries, which is carried out mainly through GDP per capita or similar unidimensional indicators, has produced mixed results. This study sets out stages for developing countries on their development path and provides an analysis of the dynamics between them, using an alternative approach to an analysis of convergence based on a single criterion (GDP per capita). In addition, it identifies the factors that determine the belonging of countries to the upper stages of development. In this regard, the performances achieved by the newly industrialised countries in terms of balanced economic growth, structural transformation and diversified exportation, encourage the idea of an identification of a group or “club” of dynamic developing countries that can be called “emerging” countries. The concept of “economic emergence” relies to this idea and builds on the characteristics of these “emerging countries”.

Would the Food Insecure Raise their Hands? Applying the case of Egypt in the era of COVID-19

Racha Ramadan
20/09/2022

Food security can be considered an economic access challenge in Egypt, as poverty and food security are highly correlated. The spread of the novel coronavirus, with its economic drawback, is expected to jeopardise Egyptian food security by exacerbating existing challenges. Using the Economic Research Forum (ERF) COVID-19 Monitor data for Egypt (Wave 2), logit models are estimated to examine the determinants of food security in Egypt, during June 2021, post the spread of COVID-19. Two indicators are used to measure food security. First the households’ ability to obtain the usual amount of food, without reporting any change because of a decline in income or increase in prices. This is considered as economic access to food. The second measure considers food consumption; households are considered food secured if they do not have to reduce their usual number of meals/portions. The results show that females, low-educated, self-employed, those working in hard-hit sectors, those who lost their income and households with a high share of children under six years old are all more likely to be food insecure.

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