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Financial Liberalization and Money Demand in Morocco


  • Younes Zouhar

    () (Coopérative Amal , Hay Fath, CYM, Rabat, Morocco)

  • Abderrahman Kacemi


This paper investigates whether the financial liberalization that Morocco has been undertaking since the early 1990’s has affected the demand for money. To achieve this analysis, the Johansen maximum-likelihood procedure is employed to estimate the long-run equilibrium relationship between real money aggregates (M1 and M3) and their determinants. The empirical results indicate that for both narrow and broad money demand for the period 1982Q1 to 2005Q4, there exist long-run money demand functions. These findings are corroborated by the error correction method. The results point also to the significance of foreign influences and more precisely to the relevance of the role of the foreign interest rate variable that was omitted in previous studies. Stability tests conducted don’t indicate the occurrence of a structural break in money demand.

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  • Younes Zouhar & Abderrahman Kacemi, 2008. "Financial Liberalization and Money Demand in Morocco," Working Papers 389, Economic Research Forum, revised 01 Jan 2008.
  • Handle: RePEc:erg:wpaper:389

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    References listed on IDEAS

    1. Sena Eken & Jörg Decressin & Filippo Cartiglia & Klaus-Stefan Enders & Saleh M. Nsouli & Van Can Thai, 1995. "Resilience and Growth Through Sustained Adjustment; The Moroccan Experience," IMF Occasional Papers 117, International Monetary Fund.
    2. International Monetary Fund, 1991. "Financial Sector Reforms and Monetary Policy," IMF Working Papers 91/127, International Monetary Fund.
    3. Hoffman, Dennis L & Tahiri, Chakib, 1994. "Money Demand in Morocco: Estimating Long-Run Elasticities for a Developing Country," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(3), pages 305-324, August.
    4. Sophocles N. Brissimis & George Hondroyiannis & P. A. V. B. Swamy & George S. Tavlas, 2003. "Empirical Modelling of Money Demand in Periods of Structural Change: The Case of Greece," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(5), pages 605-628, December.
    5. Mansor Ibrhim, 2001. "Financial Factors and the Empirical Behavior of Money Demand: A Case Study of Malaysia," International Economic Journal, Taylor & Francis Journals, vol. 15(3), pages 55-72.
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