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The Effects of Fiscal Policy Shocks in Morocco: An SVAR Approach

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  • Firdawss Tahri
  • Mohamed Karim

Abstract

Interest in assessing the effects of fiscal policy shocks on macroeconomic variables, especially on GDP, has surged in recent years, since it was expected to reestablish the economic balance after the recent recession. The majority of empirical studies estimate the impact of fiscal policy on economic activity using vector autoregressive (VAR) models. This paper analyzes the effect of fiscal shocks on economic activity by applying the structural VAR methodology proposed by Blanchard and Perotty (2002) to Moroccan data. The empirical findings are consistent with other studies related to emerging economies. This assessment reveals a positive impact of expansionary fiscal policy on economic activity. However, the fiscal multipliers are found to be very small, meaning that the economic activity is not significantly influenced by fiscal policy shocks.

Suggested Citation

  • Firdawss Tahri & Mohamed Karim, 2018. "The Effects of Fiscal Policy Shocks in Morocco: An SVAR Approach," Applied Economics and Finance, Redfame publishing, vol. 5(2), pages 152-157, March.
    • Handle: RePEc:rfa:aefjnl:v:5:y:2018:i:2:p:152-157
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    References listed on IDEAS

    as
    1. Olivier Blanchard & Roberto Perotti, 2002. "An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1329-1368.
    2. Caldara, Dario & Kamps, Christophe, 2008. "What are the effects of fiscal policy shocks? A VAR-based comparative analysis," Working Paper Series 877, European Central Bank.
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    More about this item

    Keywords

    fiscal policy shocks; SVAR modeling; impulse response function;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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