Do Financial Flows raise or reduce Economic growth Volatility? Some Lessons from Moroccan case

Jamal Bouoiyour (), Amal Miftah and Refk Selmi

MPRA Paper from University Library of Munich, Germany

Abstract: The purpose of the paper is twofold. Firstly, it attempts to analyze accurately the volatility of economic growth and financial flows (i.e. remittances and FDI) in the case of Morocco. Secondly, it tries to address the possible effects of these financial flows on the economic growth. We provide evidence that remittances are less volatile than FDI in terms of duration of persistence, intensity of shock and the “volatility clustering”. Furthermore, remittances can smooth the volatility of growth, while FDI flows sustain and aggravate it. Altruistic foundations, counter-cyclicality and concentration of remittances in Europe have been advanced as elements of explanation of these outcomes. Similarly, foreign investors seeking only profits have a pro-cyclical behavior and are greatly sensitive to economic conditions in the country of origin.

Keywords: Economic growth volatility; Remittances; FDI; GARCH models. (search for similar items in EconPapers)
JEL-codes: F0 F24 G0 (search for similar items in EconPapers)
Date: 2014-07-11
New Economics Papers: this item is included in nep-ara and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:57258

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