Determination of the viability threshold of the external position in Morocco

Abdellali Fadlallah and Zakaria Chakhat

MPRA Paper from University Library of Munich, Germany

Abstract: This paper discusses the sustainability of the moroccan current account and his assessment. To proceed, a descriptive analysis of the evolution of the current account allowed to to assimilate the behavior of its various components in connection with national and international economic conditions. As a result, it was necessary to examine the different determinants of the behavior of the current account deficit in order to understand economic policy decisions. An econometric analysis was done, in this way, we opte for a VECM that allowed to capture the long-term relationship, then we study the impact of the explanatory variables on the current account. The review of the sustainability threshold calculated by the Reisena method ensures a consistent results examination and shows that signs of unsustainability have emerged since 2008. However, it is only in 2011 that the current account shows deficits that exceed widely the optimal threshold exposing the national economy to extreme vulnerability.

Keywords: Deficit of the current account; Viability; VECM. (search for similar items in EconPapers)
JEL-codes: F14 F41 (search for similar items in EconPapers)
Date: 2017-12-13, Revised 2017-12-13
New Economics Papers: this item is included in nep-ara
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