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Morocco and the US Free Trade Agreement: A specific factors model with unemployment and energy imports

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  • Malki, Mostafa
  • Thompson, Henry

Abstract

This paper examines the impact in Morocco of its pending free trade agreement with the US in a specific factors model with unemployment and energy imports. Projected price scenarios across eight industries lead to adjustments in outputs, energy imports, rural wages, urban wages, and the unemployment rate. The model predicts substantial adjustments for reasonable price scenarios. Rural wages fall unless agriculture is subsidized. Unemployment, assumed inversely related to output, is sensitive to price changes. Factor substitution only affects the degree of output adjustments. Adjustments in capital returns lead to industrial investment and subsequent long run output adjustments.

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  • Malki, Mostafa & Thompson, Henry, 2014. "Morocco and the US Free Trade Agreement: A specific factors model with unemployment and energy imports," Economic Modelling, Elsevier, vol. 40(C), pages 269-274.
    • Handle: RePEc:eee:ecmode:v:40:y:2014:i:c:p:269-274
    DOI: 10.1016/j.econmod.2014.04.020
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    7. Li, Chunding & Wang, Jing & Whalley, John, 2016. "Impact of mega trade deals on China: A computational general equilibrium analysis," Economic Modelling, Elsevier, vol. 57(C), pages 13-25.

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