Human labor input is considered the essential core in arising and increasing gross national product, so the equilibrium between supply and demand for labor, is one of the pivots of Egyptian strategy, the overcoming unemployment is the challenging for economic reform in Egypt, by creation productive true employment in all fields. There are many problems hinder motivation the economic development, so the main research problem of the study, can be summarized in the effectiveness of economic reform policies, in the shade of fiscal and monetary policies tools that affect the equilibrium of the structure of labor market. The objective of the study is to explore the effect and role of the economic variables on the behavior and equilibrium of the economic sectors relations through the general equilibrium model. To achieve the objective of the study, the dynamic Liverpool model, that is considered one of the general equilibrium models was estimated, by simultaneous equations system, according to Jerry Hausman method of non linear full information maximum likelihood (NL-FIML). The Liverpool model consists of 28 behavioral equations, and 9 identitiy equations, and included 34 endogenous variables, 28 lagged endogenous variables, and 16 exogenous variables. The study detected and remedied the econometric problems, i.e., autocorrelation, heteroscedasticity, non normality of the random error term, and multicollinearity among independents variables, by using Beach-Mackinnon, White’s generalized method of moments, Box-Tidwell, and Marquardt ridge algorithms, for the previous problems respectively. The study used time series data for analysis Liverpool model, that collected from different sources to cover the period (1980-2002), with respect to agriculture, commodities, and services sectors in Egypt. The results of Liverpool model were consistent with the economic theory, it is noticed that the agricultural sector came in the first order according to the effect of the demand for labor in increasing the agricultural domestic ...
