Post-COVID inflation and monetary policy in Morocco: analysis using a Bayesian VAR model

Faïçal Lakhchen

African Journal of Economic and Management Studies, 2026, 1-22

Abstract: PurposeThis study investigates the key drivers of inflation in Morocco and assesses the effectiveness of post-COVID monetary policy interventions in managing inflationary dynamics.Design/methodology/approachThe analysis is based on a Bayesian Vector Autoregression (BVAR) model that captures the dynamic interactions between inflation, energy prices, GDP growth, exchange rate and policy rate. Structural shocks were identified using a recursive identification scheme.FindingsThe results indicate that energy prices and economic growth are the main drivers of inflationary pressures, jointly accounting for over 30% of the variance in inflation, while the exchange rate contributes approximately 6%. The inflation in Morocco shows strong persistence over the short term. The post-COVID monetary policy had limited immediate effects on inflation but played a crucial role in anchoring expectations and supporting medium-term price stability.Originality/valueThis study is among the first to apply a BVAR and a TVP-VAR framework to inflation dynamics in Morocco by incorporating newly constructed quarterly real GDP data. It provides novel empirical evidence on the relative importance of supply and demand shocks in a developing economy context, and highlights the structural constraints affecting the transmission of monetary policy in the post-pandemic period.

Keywords: Inflation drivers; Monetary policy; COVID-19; Morocco (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/ajems/article/doi/10.1108/ ... d-monetary-policy-in (text/html)
https://www.emerald.com/ajems/article-pdf/doi/10.1 ... s-12-2024-0731en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ajemsp:ajems-12-2024-0731

DOI: 10.1108/AJEMS-12-2024-0731

Access Statistics for this article

African Journal of Economic and Management Studies is currently edited by Prof John Kuada

More articles in African Journal of Economic and Management Studies from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().