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The Impact of the Fiscal Policy on Income and the Consumption of the Poor Households in Morocco: An Analysis with a Computable General Equilibrium Model (CGEM)

El Moussaoui Mohamed and Mohamed Karim ()

International Journal of Economics and Finance, 2017, vol. 9, issue 4, 79-89

Abstract: This article examines the effects of the fiscal policy on income and the consumption of the poor households in urban and rural areas. The evaluation of this impact is carried out by the use of a real and static Computable General Equilibrium Model (CGEM) in open economy and with government. The Social Accounting Matrix of the year 2013 is used for the supposed simulations. The results obtained show clearly that 50% direct tax reduction in income for the urban poor households and 100% for the rural ones make it possible to increase significantly the disposable income of these households as well as improving their consumption. On the other hand, the other policies such as exempting the agricultural and food commodities from the indirect tax, combined with 20% increase in this tax for the industrial products and the private services, or the exemption of the agricultural and food products from the customs duties, do not have a positive effect on the income and the consumption of the poor households.

Keywords: fiscal policy; poverty; computable general equilibrium model (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:4:p:79-89