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The spatial (interprovincial) computable general equilibrium model for Morocco: theoretical specification and current developments

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  • Mahmoud Arbouch
  • Eduardo Amaral Haddad

Abstract

This paper presents the theoretical specification and current developments of a Spatial (Interprovincial) Computable General Equilibrium (SCGE) model for Morocco. The model is formulated as a Johansen-type CGE system, solved in linearized form, and is designed to analyze the regional and national impacts of policy shocks within an integrated interregional economic framework. The Moroccan economy is disaggregated into 72 provinces, 20 production sectors, multiple institutional agents, and an external sector, allowing for detailed representation of interprovincial trade, production linkages, and income generation. Production technologies combine nested CES and Leontief structures, capturing substitution possibilities among regional and foreign sources of intermediate inputs and primary factors, while household behavior follows a Stone-Geary (Linear Expenditure System) specification. The model incorporates explicit treatments of investment allocation, capital accumulation, labor markets, migration, government behavior, and price formation under constant returns to scale, with extensions to allow for agglomeration economies. Calibration is based on a top- down disaggregation of the national input-output system for 2019, complemented by demographic and fiscal data, and parameterized using a combination of econometric estimates and standard values from the literature. In addition, the paper introduces a CO₂-emissions module that enables the simulation of carbon taxation policies and interregional revenue recycling schemes. The SCGE model provides a flexible and internally consistent tool for evaluating the regional distributional, environmental, and macroeconomic effects of structural reforms and climate-related policies in Morocco.

Suggested Citation

  • Mahmoud Arbouch & Eduardo Amaral Haddad, 2025. "The spatial (interprovincial) computable general equilibrium model for Morocco: theoretical specification and current developments," Research papers & Policy papers on Economic Trends and Policies 2525, Policy Center for the New South.
    • Handle: RePEc:ocp:rpaeco:rp18_25
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    References listed on IDEAS

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    1. Eduardo Haddad, 2009. "Interregional Computable General Equilibrium Models," Advances in Spatial Science, in: Michael Sonis & Geoffrey J. D. Hewings (ed.), Tool Kits in Regional Science, chapter 4, pages 119-154, Springer.
    2. Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2005. "Market imperfections in a spatial economy: some experimental results," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 476-496, May.
    3. Peter, Matthew W. & Horridge, Mark & Meagher, G. A. & Naqvi, Fazana & Parmenter, B. R., "undated". "The Theoretical Structure of MONASH-MRF," Center of Policy Studies (COPS) Impact Project Papers 266356, Monash University Center of Policy Studies.
    4. Hertel, Thomas & Hummels, David & Ivanic, Maros & Keeney, Roman, 2007. "How confident can we be of CGE-based assessments of Free Trade Agreements?," Economic Modelling, Elsevier, vol. 24(4), pages 611-635, July.
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