What Mitigates Economic Growth Volatility in Morocco?: Remittances or FDI

Refk Selmi, Jamal Bouoiyour () and Amal Miftah

Journal of Economic Integration, 2016, vol. 31, issue 1, 65-102

Abstract: The purpose of the paper is twofold. First, it seeks to meticulously analyze the volatility of economic growth and financial flows in the case of Morocco, i.e., remittances and Foreign Direct Investment. Second, it attempts to address the effects of these financial flows on the economic growth volatility. We provide strong evidence that remittances are less volatile than Foreign Direct Investment with respect to the duration, intensity and volatility clustering. Furthermore, remittances can mitigate the volatility of growth, while Foreign Direct Investment flows amplify it. Our results do not imply that financial flows should be privileged by Moroccan authorities. In fact, our results should encourage the government to implement proactive and favourable policies geared towards productive investment.

Keywords: Economic Growth Volatility; Remittances; FDI; Morocco; Generalized Autoregressive Conditional Heteroskedasticity (GARCH) Models (search for similar items in EconPapers)
JEL-codes: F00 F24 G00 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0679

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