Do Income Leakage Variables have A Positive or Negative Impact on the Performance of the Economy? Empirical Study on Egypt | ||
| المجلة العلمية للدراسات التجارية والبيئية | ||
| Article 58, Volume 12, Issue 3, July 2021, Pages 36-67 PDF (959.36 K) | ||
| Document Type: المقالة الأصلية | ||
| DOI: 10.21608/jces.2021.204600 | ||
| Author | ||
| Ashraf Helmy Salama* | ||
| Associate Professor of Economics, Egyptian Chinese University, Faculty of Economics and International Trade, Cairo, Egypt. | ||
| Abstract | ||
| This study applied the two-stage least squares model (TSNLS and ARMA) to examine the effect of income leakages, represented by spending on imports and domestic savings, on the aggregate domestic demand, represents the sum of domestic consumption and investment spending, in Egypt, through the velocity of the money supply channel during the period 2000-2019. The empirical findings show a one-year lag negative impact flowing from the velocity of the money supply to the aggregate domestic demand, and the negative statistical response of the aggregate domestic demand to the velocity of money supply becomes more powerful and statistically meaningful when the income leakage variables have been considered in the model. Thus, it can be said that income leakage variables contribute to the negative impact of the velocity of money supply on the performance of the Egyptian economy. | ||
| Keywords | ||
| income leakage; velocity of money; domestic savings; imports; aggregate demand; Egypt | ||
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