Rasha Awad

Analysis of the Inter-relationship between the Real Economy and the Financial Economy, with Application on the Egyptian Economy. The interrelation between the real and the financial economy occupies a significant importance within the literature of economic analysis. This dissertation aimed at analyzing this issue with an application on the case of the Egyptian economy. The dissertation consisted of two parts. First part sheds light on three dimensions analyzing this interrelation which are: (a) Economic fluctuations including its sources and the concept of long term economic waves, (b) The asset price bubbles, and its wealth effects on the consumption and investment expenditure, as well as a case study of the Japanese and American bubbles, and (c) Feedback mechanisms, and explaining economic imbalances on the long term using the Flying Gees model and the Financial Instability Hypothesis. As well, the research studied the case of the Great Depression and Asian Crisis. The second part analyzed the interrelations between the real and financial economy in the case of Egypt, covering the period from the beginning of the eighties, with emphasis on the nineties in some areas. It conducted an analysis of the economic developmental structure, and estimated both the household consumption and investment expenditure functions, in addition to examine the relation between public and private investment. It also applied the Structure – Behaviour – Performance Model in order to analyze the Egyptian banking market. As well, the study discovered the main developments related to the Egyptian Stock Market, and its interrelation with the Banking Sector. Results of the causality tests revealed the weak relation between both sides of the economic system. Accordingly, the Dissertation suggested a preliminary management framework to improve the economic performance, using the Balanced Scorecard concept.

Determinants of Investment in Capital Markets Investors usually opt to invest in direct investment channels as opposed to financial markets, especially capital markets. This phenomenon can be explained by the absence of an organized and effective market, or due or the lack of knowledge as to how to efficiently invest in securities. Such investment has its drawbacks, not only on the individual investment decision level, but also on the national economic policies level. This thesis intends to introduce the optimal methodology for investment in capital markets. It presents the investment process steps necessary to allow the investor to maximize the expected rate of return with moderate level of risk. Accordingly, the thesis addresses three determinants for creating and managing investment portfolios, based on the three schools of thought belonging to finance and portfolio management literature, as follows: The investor allocates his portfolio resources among the different asset classes (asset allocation) based upon Quantitative analysis. Among the attractive countries, the investor uses the fundamental analysis to choose the best countries to allocate investments in.