ABSTRACT 
9 


INTRODUCTION 
11 


Need for the Study 
11 


Purpose of the Study 
15 


CHAPTER 1: HISTORICAL SURVEY OF THE LEBANESE ECONOMY:
FROM PRE WAR TO POST WAR
 21 


1.1 General Background 
21 


1.11 Historical Apercu of the Prewar Period
 22 


1.12 Deterioration of the Parity of the Lebanese Pound and the Hyperinflation
 23 


1.13 The Outstanding Debt in the Post war Period, 1990 –2000
 27 


1.14 The Economic Recession of 19962000
 28 


1.15 Lebanon and Selected Other Countries
 29 


1.2 Poverty and Income Distribution
 32 


1.3 Conclusion
 40 


CHAPTER 2: REVIEW OF LITERATURE
 45 


2.1 Introduction
 45 


2.2 Interest Rate Theories
 46 


2.3 Income Hypotheses
 48 


2.31 The Absolute Income Hypothesis
 49 


2.32 The Relative Income Hypothesis
 51 


2.33 The Permanent Income Hypothesis
 56 


2.331 The Effect of Tax Cuts on Spending According to the PIH
 61 


2.34 The Lifecycle Hypothesis
 63 


2.4 Implications for Causality between Saving Rates and Rates of Economic Growth
 73 


2.5 Conclusion
 77 


CHAPTER 3: PROCEDURES AND METHODOLOGY
 79 


3.1 Introduction
 79 


Table 3.1. National Saving
 81 


3.2 Selection of National Variables for the Study
 82 


Table 3.2. Explanatory Variables of National Saving
 84 


3.3 Objectives of Multiple Regression
 85 


3.4 Research Design of a Multiple Regression Analysis
 85 


3.5 Assumptions in Multiple Regression Analysis
 86 


3.6 Estimating the Regression Model and Assessing Over all Model Fit
 88 


3.61 Evaluating the Variate for the Assumptions of Regression Analysis
 92 


3.7 Conclusion
 95 


CHAPTER 4: INTERPRETING AND VALIDATING THE REGRESSION VARIATE
 97 


4.1 Introduction
 97 


4.2 Measuring the Degree and Impact of Multicollinearity
 97 


4.3 Using the Regression Coefficients
 99 


4.4 Validating the Results
 104 


4.41 Confirmatory Regression Model
 104 


4.5 Comparative Study: Lebanon versus Syria, Jordan, and Egypt
 107 


4.51 Lebanon: From War to Post war
 108 


4.52 Syria, Jordan, and Egypt
 109 


4.6 Conclusion
 111 


CHAPTER 5: POLICY RECOMMENDATION
 113 


5.1 Introduction
 113 


5.2 Promoting Saving
 114 


5.3 Fiscal Deficits and National Saving
 117 


5.4 The Direction of Causality for Policy Recommendation
 123 


5.5 Conclusion
 125 


CONCLUSION
 127 


Post war Economies
 127 


Saving, an Engine for Growth
 127 


Summary and Limitations of the Research Findings
 130 


Suggestions for Further Research
 132 


TABLES
 135 


Table 1.1. Measures of GDP (in mil lions of Lebanese Pounds)
 135 


Table 1.2. Selected Social Indicators
 136 


Table 1.3. Real GDP and Real Per Capita GDP
 137 


Table 1.4. Public Finances – Actual 1992 – 1997 (LL billion)
 138 


Table 1.5a. Exchange Rate: Lebanese Pound / US Dollar (last month of the year)
 139 


Table 1.5b. Exchange Rate: Lebanese Pound / US Dollar (last month of the year).
 140 


Table 1.6. Outstanding Debt, 1992 – 1997 (LL billions)
 141 


Table 1.7. Public Finances  Bud get 1992 – 1997 (LL billions)
 142 


Table 1.8. Relative Distribution of Employment by Permanency Type, 1970 and 1996 (%)
 142 


Table 1.9. Unemployment Rates by Age and Sex, 1970, 1996, and 1997 (%)
 142 


Table 1.10. Earnings by Age Group, 1995 (%)
 143 


Table 1.11. Distribution of Families Based on Monthly In come and Sector of Employment of Head of House hold, 1994 (%)
 143 


Table 1.12. Average Monthly Income of Households (AMIH) in Lebanon at Nominal Prices, at Real Prices of 1988, and in US Dollar (19741999)
 144 
Table 1.13. Average Monthly Income of Households (AMIH) by Income Bracket in Lebanon at Nominal Prices, at Real Prices of 1988,
and in US Dollar (19741999)
 144 


Table 1.14. Distribution of Income of House hold Head in Lebanon (19741999)
 145 


Table 1.15. GDP at Constant Prices of 1995 (mil lions of US$)
 146 


Table 1.16. Real Growth Rates of GDP at Constant Prices of 1995 (%)
 147 


Table 1.17. GDP at Current Prices (mil lions of US$)
 147 


Table 1.18. GDP Per Ca pita at Constant Prices of 1995 (US$)
 148 


Table 1.19. Real Growth Rates of GDP Per Capita at Constant Prices of 1995 (US$)
 148 


Table 1.20. GDP Deflator (%)
 149 
Table 1.21. Percentage of Private Final Consumption Expenditures to GDP
at Current Prices
 149 
Table 1.22. Percentage of Gross Fixed Capital Formation to GDP at Current Prices
 150 
Table 1.23. Percentage of Government Final Consumption Expenditures
to GDP at Current Prices
 150 
Table 1.24. Percentage of Exports to GDP at Current Prices
 151 
Table 1.25. Percentage of Imports to GDP at Current Prices
 151 


APPENDIX: REGRESSION TABLES
 153 


Regression 1: National saving as a function of real GDP, inflation,
rates on de posits in LP, rates on de posits in $, and balance of payments
 153 
Regression 2: Investment as a function of nominal savings in Lebanon
 160 
Regression 3: Investment as a function of nominal savings in Syria
 161 
Regression 4: Investment as a function of nominal savings in Jordan
 163 
Regression 5: Investment as a function of nominal savings in Egypt
 164 
Regression 6: Nominal GDP as a function of nominal savings in Lebanon
 165 
Regression 7: Nominal GDP as a function of nominal savings in Syria
 166 
Regression 8: Nominal GDP as a function of nominal savings in Jordan
 168 
Regression 9: Nominal GDP as a function of nominal savings in Egypt
 169 
Regression 10: Nominal GDP as a function of government
consumption in Lebanon
 170 
Regression 11: Nominal GDP as a function of government
consumption in Syria
 171 
Regression 12: Nominal GDP as a function of government
consumption in Jordan
 173 
Regression 13: Nominal GDP as a function of government
consumption in Egypt
 174 
Regression 14: Nominal GDP as a function of investment, government
consumption, and private final consumption in Lebanon
 175 
Regression 15: Nominal GDP as a function of investment, government
consumption, and private final consumption in Syria
 177 
Regression 16: Nominal GDP as a function of investment, government
consumption, and private final consumption in Jordan
 178 
Regression 17: Nominal GDP as a function of investment, government
consumption, and private final consumption in Egypt
 180 
BIBLIOGRAPHY
 183 
INDEX
 191 

