The Socio-Economic Impact of Income Inequality: Evaluation using a Computable General Equilibrium Model (CGE) for the case of Morocco

L'impact socio-économique de l'inégalité des revenus: Évaluation à l'aide d'un modèle d'équilibre général calculable (EGC) pour le cas du Maroc

Zakaria Chtouki
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Zakaria Chtouki: ​Laboratory of Economic Analysis and Modeling - UM5 - Université Mohammed V de Rabat [Agdal]

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Abstract: Although the world has experienced increased affluence, disparities among its inhabitants have continued to rise, reshaping our understanding of the concept of "poverty". This executive summary of my thesis dissertation presents a condensed version of a comprehensive theoretical and empirical inquiry into the socioeconomic ramifications of income inequality on the stability of a developing economy, specifically the Moroccan economy. The theoretical segment of this research involves an exploration of the underlying theories surrounding income inequality in order to conceptualize its influence on economic advancement. The empirical component is bifurcated into two distinct phases, an exploratory phase and a modeling phase. The former stage is concerned with assessing the dynamic nature of inequality in Morocco and identifying the factors contributing to its growth. The latter phase employs a static ECG model, calibrated on Moroccan SAM 2016, to simulate multiple scenarios in order to scrutinize the socioeconomic impacts of a mere 1% increase in income inequality. Our results reveal that a 1% increase in inequality precipitates a 1.73% decline in GDP.

Keywords: Income inequality; socioeconomic impact; developing economy; fiscal policy; CGE model C68 (search for similar items in EconPapers)
Date: 2022-05-12
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Published in 2022, pp.42

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