Monetary policy, real effective exchange rate and output gap in Morocco: an analysis in the presence of economic shocks

Politique monétaire, taux de change effectif réel et output gap au Maroc: une analyse en présence de chocs économiques

Imad Bassite and Younes El Khattab
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Imad Bassite: Laboratoire de performance économique et logistique Faculté des Sciences Juridiques, Économiques et Sociales (FSJES) - Mohammedia Université Hassan II de Casablanca
Younes El Khattab: Enseignant chercheur - Laboratoire de performance économique et logistique Faculté des Sciences Juridiques, Économiques et Sociales (FSJES) - Mohammedia Université Hassan II de Casablanca

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Abstract: This article examines the impact of monetary policy, inflation and the real effective exchange rate (REER) on the output gap in Morocco, in an economic context marked by recurring internal and external shocks. Using an ARDL model on annual data covering the period 1990-2023, the study distinguishes between the short-term and long-term effects of the main macroeconomic variables on the output gap. The results show that money supply has a significant short-term effect, reflecting the relative effectiveness of monetary policy in stimulating demand and mitigating cyclical gaps. In contrast, in the long term, only the TCER has a positive and significant influence, highlighting the crucial role of external competitiveness in reducing the output gap. Inflation, on the other hand, has no statistically significant impact, reflecting the caution of Moroccan monetary policy in the face of inflationary risks. The article recommends close coordination between monetary and exchange rate instruments, as well as a strengthening of structural policies, in order to ensure greater macroeconomic resilience.

Keywords: ARDL; Morocco; competitiveness; inflation; exchange rate; output gap; monetary policy; monetary policy output gap exchange rate inflation ARDL Morocco competitiveness (search for similar items in EconPapers)
Date: 2025-07-28
New Economics Papers: this item is included in nep-ara, nep-mac and nep-mon
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Published in REVUE MAROCAINE DE PUBLUCATION DES RECHERCHES SCIENTIFIQUES - RMPRS, A paraître, Volume 7 (Issue 07 (2025)), https://rmprs.com/issues/seventh/40. ⟨10.5281/zenodo.16549874⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05190487

DOI: 10.5281/zenodo.16549874

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