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Should Moroccan Officials Depend on the Workers’ Remittances to Finance the Current Account Deficit?

  • Bentour, El Mostafa

The Moroccan economy relies heavily on remittances from abroad to the extent they are far more significant sources of income than others such as foreign direct investments and tourism. To assess the reliability of this external financing source by testing the resilience vis-à-vis the hosting countries, we summarize, in this paper, the impact of the business cycles of major hosting European countries on Moroccan workers’ remittances using impulse response functions of a VAR modeling approach. Our findings include, first: the remittances to Morocco and major European countries’ GDP are positively correlated (i.e, are procyclical). Second, the recent global financial crisis and the following downturns in countries, such as Italy and Spain, significantly reduced remittances, while remittances from Germany, Netherlands, Belgium and Luxembourg do not seem to be extremely affected.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 52290.

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Date of creation: 01 May 2013
Date of revision: 01 May 2013
Handle: RePEc:pra:mprapa:52290
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  2. Frankel, Jeffrey A., 2010. "Are Bilateral Remittances Countercyclical?," Scholarly Articles 4450131, Harvard Kennedy School of Government.
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  16. Razzak Weshah A. & Bentour El M., 2013. "Do Developing Countries Benefit from Foreign Direct Investments? An Analysis of Some Arab and Asian Countries," Review of Middle East Economics and Finance, De Gruyter, vol. 9(3), pages 357-388, December.
  17. Adams, Richard Jr. & Page, John, 2005. "Do international migration and remittances reduce poverty in developing countries?," World Development, Elsevier, vol. 33(10), pages 1645-1669, October.
  18. Serdar Sayan & B. Onur Tas & Yasemin Yalta, 2010. "Cyclical Behavior of Mexican Remittances over the Mexican and the US Business Cycles," Working Papers 1008, TOBB University of Economics and Technology, Department of Economics.
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