The Relationship Between Domestic Saving , Domestic Investment and Economic Growth In Egypt During the Period (1970-2012)

The aim of the research is to verify the relationship between the saving, investment and economic growth in Egypt, in order to determine the quantitative and causal relationships between them, as well as the channels through which the transmission of this effect. through the study of the relationnship between the three variables in the economic literature, and its evolution in the Egyptian economy during the study period, and then through the standard model depends on the method of cointegration for Johansson, and model (VECM) is measured relations between them in the long run and short run, as well as identifying the direction of causal relationships through the analysis of Granger causality based on the results of model (VECM).
The study shows of the evolution of savings and investment rates Egyptian economy, low rates and lack of domestic savings for financing investment required, whether in absolute terms or compared with the regional and global level, and this was reflected in turn in the low rate of economic growth, as well as the lack of stability as a result of increased reliance on external sources of income and rent.
The results of measurement in the longrun savings that positively affects the morale on both investment and economic growth, and the positive impact of investment and morally on both savings and economic growth.Which indicates the importance of mobilizing savings and positive role in increasing investment and, therefore, capital accumulation, which contributes to the rise in the rate of economic growth. The results show that the shortrun savings and investment in the current period is affected by the values ​​obtained in the two previous periods, and that the positive impact of investment on economic growth with periods of slowdown. As the speed of adjustment to any shocks or imbalances in savings and investment are high moral.
The results of the causal relationnships in the long run on the cumulative nature of savings and investment, and that there is a oneway relationship is that the growth of investment, which in turn causes the cause of savings, which indicates that demand is causing the supply and stimulated. While in the short run, both saving and investment are causing economic growth, whether individually or grouped, any supply is causing demand and stimulated, and the growth of investment and savings together cause which is consistent with the long run. All of this underscores the strength of the relationship between the three variables in the Egyptian economy.