OKUN’S LAW AND PHILLIPS CURVE REVISITED: NONLINEAR EVIDENCE FROM THE MOROCCAN ECONOMY

Ibnouzahir Youssef, Herraz Ismail, Bassite Imad, Elkhattab Younes and Hefnaoui Ahmed
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Ibnouzahir Youssef: HASSAN II UNIVERSITY OF CASABLANCA, MOROCCO FACULTY OF LEGAL, ECONOMIC AND SOCIAL SCIENCES, MOHAMMEDIA, ECONOMIC AND LOGISTICS PERFORMANCE RESEARCH LABORATORY
Herraz Ismail: HASSAN II UNIVERSITY OF CASABLANCA, MOROCCO FACULTY OF LEGAL, ECONOMIC AND SOCIAL SCIENCES, MOHAMMEDIA, ECONOMIC AND LOGISTICS PERFORMANCE RESEARCH LABORATORY
Bassite Imad: HASSAN II UNIVERSITY OF CASABLANCA, MOROCCO FACULTY OF LEGAL, ECONOMIC AND SOCIAL SCIENCES, MOHAMMEDIA, ECONOMIC AND LOGISTICS PERFORMANCE RESEARCH LABORATORY
Elkhattab Younes: HASSAN II UNIVERSITY OF CASABLANCA, MOROCCO FACULTY OF LEGAL, ECONOMIC AND SOCIAL SCIENCES, MOHAMMEDIA, ECONOMIC AND LOGISTICS PERFORMANCE RESEARCH LABORATORY
Hefnaoui Ahmed: HASSAN II UNIVERSITY OF CASABLANCA, MOROCCO FACULTY OF LEGAL, ECONOMIC AND SOCIAL SCIENCES, MOHAMMEDIA, ECONOMIC AND LOGISTICS PERFORMANCE RESEARCH LABORATORY

Annals - Economy Series, 2025, vol. 6, 71-86

Abstract: This study examines the validity of Okun’s Law and the Phillips Curve in Morocco within a nonlinear framework, aiming to explain persistent unemployment despite sustained growth. Using annual data from 1981–2024 applying NARDL models, the analysis reveals asymmetric relationships among investment, inflation, growth, and unemployment. Negative shocks in investment and output significantly raise unemployment, while positive shocks yield weaker effects, confirming partial validity of Okun’s Law but rejecting the Phillips Curve. Results highlight Morocco’s structural rigidities and suggest policy measures promoting inclusive, labor-intensive investment and countercyclical strategies to mitigate adverse shocks and foster sustainable employment.

Keywords: Okun’s Law; Phillips Curve; Nonlinear ARDL (NARDL); Unemployment; Moroccan Economy (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:cbu:jrnlec:y:2025:v:6:p:71-86

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