Prague Economic Papers 2024, 33(3):357-379 | DOI: 10.18267/j.pep.858

Budgetary policy and Macroeconomic resilience in Morocco: Assessment and Impact

Oussama Ritahi ORCID..., Abdellah Echaoui ORCID...
University Mohammed V- Souissi, Rabat, Morocco

This study investigates the macroeconomic resilience of the Moroccan economy using a comprehensive analysis of key indicators and policy variables. Utilising data from sources such as the World Bank, we examined GDP per capita, government debt, government final expenditure, agriculture and industry sectors as a percentage of GDP, output gap, and trade openness. Applying the Autoregressive Distributed Lag (ARDL) method, we established both long-run and short-run relationships between these variables and the output gap, which represents the cyclical trend in the economy. Our findings revealed that both government final consumption in % of GDP and government debt in % of GDP have a significant impact on the economy as they were found to be countercyclical measures, mitigating the adverse effects of shocks on the economy. The ARDL model's diagnostic tests confirmed the validity of our estimations, ensuring robust and reliable results. Overall, this study sheds light on the budgetary determinants of macroeconomic resilience in the Moroccan economy and provides valuable insights for policymakers to implement measures that promote stability and sustainability. By carefully managing government expenditure and debt levels, the Moroccan economy can better navigate economic shocks and foster a more resilient and prosperous future.

Keywords: macroeconomic resilience, ARDL, Budgetary policy, Moroccan economy
JEL classification: C32, E32

Received: July 29, 2023; Revised: December 10, 2023; Accepted: January 21, 2024; Published: June 28, 2024  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Ritahi, O., & Echaoui, A. (2024). Budgetary policy and Macroeconomic resilience in Morocco: Assessment and Impact. Prague Economic Papers, 33(3), 357-379. doi: 10.18267/j.pep.858
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Aghion, P., Angeletos, G., Banerjee, A., Manova, K. (2005). Volatility and Growth: Credit Constraints and Productivity - Enhancing Investment. NBER Working Paper, 11349,1-33. https://doi.org/10.3386/w11349 Go to original source...
    2. Bhattacharya, D., Dasgupta, S. (2012). Global Financial and Economic Crisis: Exploring the Resilience of the Least Developed Countries. Journal of International Development, 24, 673-685. https://doi.org/10.1002/jid.2860 Go to original source...
    3. Briguglio, L., Cordina, G., Farrugia, N., Vella, S. (2009). Economic Vulnerability and Resilience: Concepts and Measurements. Oxford Development Studies, 37(3), 231-247. https://doi.org/10.1080/13600810903089893 Go to original source...
    4. Briguglio, L. Piccinino, S. (2012). Growth with Resilience in East Asia and the 2008- 2009 Global Recession. Asian Development Review, 29(2), 183-206. Go to original source...
    5. Cheung, Y.-W., Lai, K. S. (1995). Lag Order and Critical Values of the Augmented Dickey-Fuller test. Journal of Business & Economic Statistics, 13(3), 277-280. https://doi.org/10.1111/j.1468-0084.1995.mp57003008.x Go to original source...
    6. Debrun, X., Pisani-Ferry, J., Sapir, A. (2008). Government Size and Output Volatility: Should We Forsake Automatic Stabilization? IMF Working Paper, 08(122), 1-55. Go to original source...
    7. Debrun, X., Kapoor, R. (2010). Fiscal Policy and Macroeconomic Stability: Automatic Stabilizer Work, Always and Everywhere. IMF Working Paper, 10(111), 1-47. Go to original source...
    8. Duval R., Elmeskov, J., Vogel, L. (2007). Structural Policies and Economic Resilience to Shocks. OECD Working Paper, 567, 1-53. Go to original source...
    9. Eller, M., Fidrmuc, J., Fungáèová, Z. (2013). Fiscal Policy and Regional Output Volatility: Evidence from Russia. Bank of Finland Discussion Paper, 13, 4-38. https://doi.org/10.1080/00343404.2015.1064884 Go to original source...
    10. Eraydin, A. (2015). Attributes and Characteristics of Regional Resilience: Defining and Measuring the Resilience of Turkish Regions. Regional Studies, 1-16. https://doi.org/10.1080/00343404.2015.1034672 Go to original source...
    11. Fatàs, A., Mihov, I. (2001). Government Size and Automatic Stabilizers: International and Intranational Evidence. Journal of International Economics, 55(1), 3-28. https://doi.org/10.1016/S0022-1996(01)00093-9 Go to original source...
    12. Fatàs, A., Mihov, I. (2006). Fiscal Policy and Business Cycle: an Empirical Investigation. Mimeo INSEAD, 1-37.
    13. Fatàs, A., Mihov, I. (2012). Special Issue: Long-Term Effects of the Great Recession. The B.E. Journal of Macroeconomics, 12(3), 1-68. https://doi.org/10.1515/1935-1690.113 Go to original source...
    14. Fatima, B., Uma, K. (2011). Determinants of Output Growth Volatility in South Africa. International Journal of Economics and Finance, 3(5), 151-160. https://doi.org/10.5539/ijef.v3n5p151 Go to original source...
    15. Fernández-Villaverde, J., Guerrón-Quintana, P. A., Kuester, K., Rubio-Ramírez, J. (2011). Fiscal Volatility Shocks and Economic Activity. NBER Working Paper Series, 17317, 1-47. https://doi.org/10.1257/aer.20121236 Go to original source...
    16. Fingleton, B., Garretsen, H., Martin, R. (2012). Recessionary Shocks and Regional Employment: Evidence on the Resilience of U.K. Regions. Journal of Regional Science, 52(1), 109-133. https://doi.org/10.1111/j.1467-9787.2011.00755.x Go to original source...
    17. Galí, J. (1994). Government Size and Macroeconomic Stability. European Economic Review, 38, 117-132. https://doi.org/10.1016/0014-2921(94)90009-4 Go to original source...
    18. Galí, J. (2003). Fiscal Policy and Monetary Integration in Europe. Economic Policy, 18(37), 535-572. Go to original source...
    19. Han, Y., Goetz, S. J. (2015). The Economic Resilience of U.S Counties during the Great Recession. The Review of Regional Studies, 45, 131-149. https://doi.org/10.52324/001c.8059. Go to original source...
    20. Hodrick, R. J., Prescott, E. C. (1997). Postwar US Business Cycles: An Empirical Investigation. Journal of Money, Credit, and Banking, 29(1), 1-16. https://doi.org/10.2307/2953682 Go to original source...
    21. Martin, R., Sunley, P. (2006). Path Dependence and Regional Economic Evolution. Journal of Economic Geography, 6, 395-437. https://doi.org/10.1093/jeg/lbl012 Go to original source...
    22. McKay, A., Reis, R. (2016). Optimal Automatic Stabilizers. CFM Discussion Papers No 1618 Go to original source...
    23. Rebelo, S. (2005). Real Business Cycle Models: Past, Present and Future. The Scandinavian Journal of Economics, 107(2), 217-238. Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content