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When Migrant Remittances Are Not Everlasting: How Can Morocco Make Up?

  • Karam Fida

    (Gulf University for Science and Technology)

This paper builds a dynamic computable general equilibrium model of the Moroccan economy that investigates the linkages that transmit the influence of remittances to households and economic sectors. The model shows that the linkage between the real estate sector and other sectors in a general equilibrium context gives interesting results. Given that the real estate sector uses intermediary inputs from other sectors, a drop of remittances will negatively affect the overall economy in contrast to the little impact such a drop will have in partial equilibrium. Hence, the channeling of investment from real estate to productive sectors is unexpectedly harmful. Positive effects arise only from an improvement in the country risk premium and from a reduction of international transfer costs.

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Article provided by De Gruyter in its journal Review of Middle East Economics and Finance.

Volume (Year): 6 (2010)
Issue (Month): 1 (July)
Pages: 1-38

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Handle: RePEc:bpj:rmeecf:v:6:y:2010:i:1:n:1
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