Assessing the Impact of Structural Reforms on Potential Output: The Case of Morocco

Hippolyte Balima, Olivier Bizimana and Ananta Dua

No 2023/222, IMF Working Papers from International Monetary Fund

Abstract: This paper assesses Morocco’s potential output and the scope for structural reforms to reverse the downward trend in economic performance observed since the Global Financial Crisis. Using multivariate filtering (MVF) techniques, our analysis finds that the downward secular trend in potential growth was primarily driven by the decline in the contribution of labor inputs. We then combine production function and general equilibrium model approaches to provide estimates of the potential macroeconomic impact of Morocco’s structural reform agenda. The results suggest that the planned structural reforms could deliver sizable output gains in the medium to long term with reforms that would reduce the large gender gap in Morocco’s labor market yielding the greatest payoffs.

Keywords: Economic growth; structural reforms; potential output; productivity; multivariate filter; dynamic stochastic general equilibrium models; fiscal policy; Morocco; production function approach; Morocco's agenda; reform multiplier; structural reform agenda; case of Morocco; Total factor productivity; Labor force participation; Production growth; Global (search for similar items in EconPapers)
Pages: 34
Date: 2023-10-27
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