SECTORAL FINANCIAL STRUCTURE AND FINANCIAL PLANNING IN EGYPT

Abstract

<p>This thesis has two major objectives. The first objective is to analyze the aggregate financial assets and financial flows, and as well their sectoral composition, in the Egyptian economy over the period 1952 through 1970. To pursue this study a Gross Financial Stocks Interrelation Matrix, the stock equivalent of the extended version of the lending/borrowing matrix was formulated for Egypt at eight points in time between 1952 and 1970. Our motivation for undertaking this study is based on the lack of literature analysing the financial flows of the non-financial sectors in Egypt. The literature on the financial structure of the Egyptian economy was limited to the institutions and assets of the financial sector. An interesting finding of this study is that the assumption of control over the economy by the Egyptian government in 1961 did not have much impact on the structure and the size of the financial flows. The second objective of the thesis is to prevent a technique of financial planning which is designed to aid in contolling the amount of high powered money issues by the central bank and thus the money supply prevailing in Egypt. in this respect, it was found that reasonable degree of accuracy in forecasting sectoral financial assets can be achieved by using naive forecast models. This means that, even in the absence of sophisticated econometric models of the Egyptian economy, a reasonable degree of accuracy in planning monetary aggregates can still be achieved.</p>