Description: Exploring Lebanon's Growth Prospects

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Exploring Lebanon's Growth Prospects

This paper attempts to identify Lebanon's greatest constraints to economic growth, following a growth diagnosis approach. It concludes that fiscal imbalances and barriers to entry are most binding on long-term growth. Macroeconomic imbalances...

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Bibliographic Details
Main Authors:	Berthélemy, Jean-Claude, Dessus, Sébastien, Nahas, Charbel
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AGGREGATE DEMAND AGRICULTURE BANKING REGULATIONS BANKING SECTOR BANKRUPTCIES BARRIERS TO ENTRY BASIS POINTS BENCHMARK BINDING CONSTRAINT BONDS BORROWING COSTS BORROWING REQUIREMENTS BUSINESS CYCLE BUSINESS CYCLES CAPITAL ACCOUNT CAPITAL FLOWS CAPITAL INFLOWS CAPITAL MARKETS CAPITAL MARKETS DEVELOPMENT CAPITAL MOBILITY CAPITAL MOVEMENTS CAPITAL OUTFLOWS CAPITAL STOCK CAPITAL STOCKS CENTRAL BANK CHECKS COMMERCIAL BANKS COMMERCIAL LAWS COMPETITIVENESS CONSUMER PRICE INDEX CONSUMERS CONTRACT ENFORCEMENT COUNTRY RISK CREDIT LINE CURRENT ACCOUNT DEFICIT DAMAGES DEBT DEBT LEVELS DEBT OVERHANG DEBT PAYMENTS DEBT RESTRUCTURING DEBT SERVICE DEBT STOCK DEBTORS DECISION MAKING DECISION TREE DEMAND FOR CREDIT DEPOSITORS DEPOSITS DEPRECIATION OF ASSETS DEVALUATION DEVELOPMENT ECONOMICS DISPOSABLE INCOME DOMESTIC MARKET DOMESTIC MARKETS DYNAMIC ANALYSIS ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC CONSTRAINTS ECONOMIC DEVELOPMENT ECONOMIC EFFICIENCY ECONOMIC FLUCTUATIONS ECONOMIC HISTORY ECONOMIC RISKS ECONOMIC SITUATION ECONOMIES OF SCALE ELASTICITY ELASTICITY OF SUBSTITUTION EMERGING ECONOMIES ENFORCEMENT OF CONTRACTS EQUILIBRIUM EQUIPMENTS EUROBOND EXCISE TAXES EXPENDITURE EXPENDITURES EXPORT GROWTH EXPORT PERFORMANCE EXPORTS EXPROPRIATION EXTERNALITIES FINANCIAL CRISIS FINANCIAL DEVELOPMENTS FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SUPPORT FINANCIAL SYSTEM FISCAL POLICIES FISCAL POLICY FIXED CAPITAL FIXED COSTS FIXED INVESTMENT FORECASTS FOREIGN CAPITAL FOREIGN COMPETITION FOREIGN CURRENCIES FOREIGN CURRENCY FOREIGN DIRECT INVESTMENTS FOREIGN FUNDS GDP GDP PER CAPITA GENERAL EQUILIBRIUM ANALYSIS GNP GOVERNMENT BORROWING GOVERNMENT SPENDING GROSS DOMESTIC PRODUCT GROSS FIXED CAPITAL FORMATION GROWTH POTENTIAL GROWTH RATE HUMAN CAPITAL IMPERFECT COMPETITION IMPLICIT SUBSIDY INCOME LEVELS INDEBTEDNESS INFLATION INFRASTRUCTURE INVESTMENTS INTELLECTUAL PROPERTY INTEREST RATES INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL FINANCE INTERNATIONAL STANDARDS INVENTORY INVESTING INVESTMENT BANKING INVESTMENT BEHAVIORS INVESTMENT CLIMATE INVESTMENT DECISIONS INVESTMENT FINANCE INVESTMENT OPPORTUNITIES INVESTMENT RATE JUDICIAL REFORM LABOR MARKET LABOR MARKETS LACK OF COMPETITION LEGAL IMPEDIMENTS LIQUID INSTRUMENTS LIQUIDITY LOAN LOCAL CURRENCY LOCAL FINANCE LONG-TERM INVESTMENTS M3 MACROECONOMIC CONDITIONS MACROECONOMIC POLICIES MACROECONOMIC RISKS MARGINAL COSTS MARKET FAILURE MARKET FAILURES MARKET MECHANISMS MARKET SHARE MARKET SHARES MATURITIES MATURITY MIDDLE INCOME COUNTRIES MONETARY FUND MONETARY STABILITY MONEY SUPPLY MONOPOLIES NATIONAL INCOME OIL PRICES OPPORTUNITY COST OPTIMIZATION OUTSTANDING CREDIT OUTSTANDING CREDITS PENSION PENSION REFORMS PER CAPITA INCOME POST-WAR RECONSTRUCTION PRICE LEVELS PRICE SUBSIDIES PRIVATE CAPITAL PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PRIVATE PROPERTY PRODUCTION COSTS PRODUCTIVE INVESTMENTS PRODUCTIVITY PRODUCTIVITY GROWTH PROPERTY RIGHTS PROTECTION OF INVESTORS PUBLIC ASSETS PUBLIC DEBT PUBLIC DEBT MANAGEMENT PUBLIC FINANCE REAL ESTATE COLLATERALS REAL ESTATE INVESTMENTS REAL EXCHANGE RATE REAL EXCHANGE RATES REAL GDP REAL INTEREST REAL INTEREST RATES REMITTANCES RESERVES RETURN RETURNS RULE OF LAW SAVINGS SOFT LOANS SOVEREIGN RATING SOVEREIGN RATINGS SOVEREIGN RISK STRUCTURAL CHANGE SUPPLY OF CREDIT TAX TAXATION TELECOMMUNICATIONS TOTAL FACTOR PRODUCTIVITY TRADE BALANCE TRADE LIBERALIZATION TRADING TRADING COSTS TREASURY TREASURY BILLS UNDERESTIMATES UNEMPLOYMENT UNEMPLOYMENT RATE UTILITY FUNCTION VALUE ADDED WAGES
Online Access:	http://documents.worldbank.org/curated/en/2007/08/8180218/exploring-lebanons-growth-prospects http://hdl.handle.net/10986/7316

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Summary:	This paper attempts to identify Lebanon's greatest constraints to economic growth, following a growth diagnosis approach. It concludes that fiscal imbalances and barriers to entry are most binding on long-term growth. Macroeconomic imbalances and related perceived risks affect the nature of investment decisions in Lebanon, in favor of liquid instruments rather than longer-term productive investments. Further, many barriers to entry discourage agents from investing in a number of markets: legal impediments to competition, corruption, and a set of fiscal incentives favoring the allocation of resources to non-tradable sectors, where potential demand and investment opportunities are scarcer. In turn, using a steady-state computable general equilibrium model, the paper assesses the long-term growth impact of a selected set of policy reforms envisaged to lift such constraints. Results suggest that 1 to 2 percentage points of additional GDP growth per year could be gained through public expenditure reform, greater domestic competition, and tax harmonization.