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This paper examines the short- and long-run economic impact of Egypt's energy subsidy reform in July 2014 (without and without compensating transfers for the bottom 40 percent of the income distribution) and the decline in global energy prices, as well as the long-run impact of phasing out the energy subsidies over a 5 year period. The analysis uses a Computable General Equilibrium model with 56 productive sectors, including 11 energy subsectors. The short-run analysis employs a two-stage factor market adjustment, with wages first fixed and then flexible. The long-run analysis is run in a recursive dynamic mode, capturing the impact of improved productivity and increased investment resulting from more efficient allocation of resources and reduction in government deficits. In the short run, the 2014 reforms lead to slightly lower consumption while investment increases strongly and production shifts from highly subsidized energy-intensive sectors such as energy, water and sanitation, and transport to other sectors (notably construction). The impact on overall consumer prices is limited. In the longer run, real GDP growth increases by about one percentage point relative to the baseline before the 2014 reform.

Activities --- Adverse Impact --- Agriculture --- Approach --- Balance --- Balance of Payments --- Base Year --- Benchmark --- Budget Deficits --- Capital --- Capital Use --- Cement --- Coal --- Consumers --- Consumption --- Controlled Prices --- Cost of Energy --- Costs --- Crude Oil --- Crude Oil Production --- Development Policy --- Diesel --- Diesel Fuel --- Distribution of Energy --- Domestic Energy --- Domestic Natural Gas --- Dry Natural Gas --- Dynamic Analysis --- Economic Efficiency --- Economic Implications --- Economic Performance --- Economic Sectors --- Economic Theory & Research --- Elasticities --- Elasticity --- Electric Power --- Electric Power Generation --- Electric Power Plants --- Electricity --- Electricity Generation --- Electricity Prices --- Employment --- Energy --- Energy and Environment --- Energy Costs --- Energy Extraction --- Energy Prices --- Energy Production and Transportation --- Energy Products --- Energy Use --- Environment --- Environment and Energy Efficiency --- Equilibrium --- Exports --- Fixed Prices --- Fuel --- Fuel Oil --- Fuel Subsidies --- Full Employment --- Gas --- Gas Output --- Gas Prices --- Gas Producer --- Gasoline --- GDP --- Generation --- Goods --- Government Expenditures --- Government Subsidies --- Growth Rate --- High Energy --- Higher Energy Prices --- Incentives --- Income --- Income Groups --- Inputs --- International Trade --- Investment --- LNG --- Macroeconomic Performance --- Macroeconomics --- Macroeconomics and Economic Growth --- Measurement --- Mobility --- Natural Gas --- Natural Gas Output --- Natural Gas Prices --- Natural Gas Pricing --- Oil --- Oil Exporters --- Oil Price --- Oil Producer --- Oil Production --- Oil Products --- Payments --- Petroleum --- Petroleum Products --- Power --- Power Generation --- Power Plants --- Power Sector --- Price --- Price Changes --- Price Elasticities --- Price Subsidies --- Prices --- Production Costs --- Productivity Growth --- Real GDP --- Refined Petroleum Products --- Sanitation --- Static Analysis --- Subsidy --- Tax --- Tax Revenue --- Total Costs --- Total Factor Productivity --- Total Factor Productivity Growth --- Trade --- Trade Balance --- Trade Deficit --- Transport --- Transport Costs --- Transport Economics Policy and Planning --- Transportation --- Utilities --- Value --- Value Added --- Wage Rates --- Wages --- Water

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Since we introduced the term "middle-income trap" in 2006, it has become popular among policy makers and researchers. In May 2015, a search of Google Scholar returned more than 3,000 articles including the term and about 300 articles with the term in the title. This paper provides a (non-exhaustive) survey of this literature. The paper then discusses what, in retrospect, we missed when we coined the term. Today, based on developments in East Asia, Latin America, and Central Europe during the past decade, we would have paid more attention to demographic factors, entrepreneurship, and external institutional anchors. We would also make it clearer that to us, the term was as much the absence of a satisfactory theory that could inform development policy in middle-income economies as the articulation of a development phenomenon. Three-quarters of the people in the world now live in middle-income economies, but economists have yet to provide a reliable theory of growth to help policy makers navigate the transition from middle- to high-income status. Hybrids of the Solow-Swan and Lucas-Romer models are not unhelpful, but they are poor substitutes for a well-constructed growth framework.

Advanced countries --- Advanced country --- Agriculture --- Balance sheet --- Banking --- Bankruptcy --- Barriers --- Benchmark --- Benchmarks --- Capital --- Capital account --- Capital accumulation --- Capital flow --- Capital investment --- Capital investments --- Capital markets --- Carbon emissions --- Central bank --- Climate change economics --- Closed economies --- Comparative advantage --- Competition --- Competitiveness --- Currency --- Currency risk --- Customers --- Decentralization --- Democracy --- Demographic --- Deregulation --- Developing countries --- Development --- Development economics --- Development policy --- Dividend --- Economic development --- Economic developments --- Economic geography --- Economic growth --- Economic outlook --- Economic performance --- Economic progress --- Economic rents --- Economic research --- Economic structures --- Economic theory & research --- Economics --- Economy --- Efficient capital --- Elasticity --- Emerging economies --- Emerging markets --- Entry point --- Environmental sustainability --- Equity --- Exchange --- Exchange rate --- Exchange rates --- Expectations --- Exports --- External finance --- Externalities --- Federal reserve --- Financial crisis --- Financial markets --- Financial sector --- Flexible exchange rates --- Foreign direct investment --- Foreign investors --- Foreign markets --- Free trade --- Future --- GDP --- GDP per capita --- Global economic prospects --- Globalization --- Goods --- Governance --- Growth models --- Growth potential --- Growth rate --- Growth rates --- Growth theories --- Growth theory --- Human capital --- Incentives --- Income --- Income levels --- Incomes --- Industrialization --- Inequality --- Infrastructure investments --- Institutional capacity --- Institutional infrastructure --- Intellectual property --- Interest --- International finance --- International trade --- Investment --- Investments --- Investors --- Knowledge economy --- Labor market --- Labor markets --- Labor policies --- Liberalization --- Liquidity --- Low-income countries --- Macroeconomic management --- Macroeconomic performance --- Macroeconomics and economic growth --- Market conditions --- Market prices --- Markets --- Mic traps --- Middle income countries --- Middle-income countries --- Middle-income country --- Middle-income economies --- Monetary policy --- Money market --- National income --- Natural resources --- Open economies --- Patents --- Per capita income --- Per capita incomes --- Political economy --- Political power --- Poverty reduction --- Price --- Prices --- Private sector development --- Productivity --- Productivity growth --- Property rights --- Protectionism --- Public policy --- Rapid growth --- Real estate --- Regional integration --- Rent --- Risk management --- Safety nets --- Share --- Social capital --- Social protections and labor --- Social safety nets --- Startups --- Structural change --- Sustainable development --- Taxes --- Technological change --- Theory --- Total factor productivity --- Total factor productivity growth --- Trade --- Trade diversion --- Trade liberalization --- Trade negotiations --- Trade policy --- Trends --- Unemployment --- Unemployment rates --- Urbanization --- Value --- Value added --- Variables --- Venture capital --- Volatility --- Wage growth --- Wages --- World development indicators --- WTO