Macroeconomic Effects of Fiscal Policy in Morocco: An Approach to Structural VAR

Abstract

This article evaluates the short-term macroeconomic effectiveness of a structural rise in public spending in Morocco through a Structural Vector Autoregressive Model (SVAR) inspired by the approach of Blanchard and Perotti (2002).

The response of the real economic activity following a structural rise of the public spending is small and significant only in the very short term. The evaluation of transmission channels reveals, moreover, a deterioration of the trade balance and a depreciation of the real effective exchange rate. Finally, the results of the estimation concluded that discretionary fiscal shocks have a Keynesian effect on the level of activity.