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Oil price volatility and macroeconomic determinants of growth: evidence from Morocco

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  • Azzi, Abdelkebir
  • Masih, Mansur

Abstract

Oil prices in the global market is usually found to be correlated with the economic growth of an economy. In this study, we make an attempt to investigate whether there is any significant relationship between oil prices and macroeconomic variables taking Morocco as a case study. We use the standard time series techniques such as, co-integration, long run structural modeling, vector error correction, and variance decompositions. We found a significant statistical relationship existing between inflation, oil price, trade balance, interest rate, and economic growth, whereby oil price and interest rate are significant macroeconomic variables on the economic growth of Morocco in the long run; and inflation and trade balance are significant on the economic growth in the short run. Oil price was found to have no impact on the economic growth in the short run. We also found evidence that exchange rate was insignificant. The results appear to be plausible and contain strong policy implications.

Suggested Citation

  • Azzi, Abdelkebir & Masih, Mansur, 2018. "Oil price volatility and macroeconomic determinants of growth: evidence from Morocco," MPRA Paper 108943, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:108943
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    References listed on IDEAS

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    More about this item

    Keywords

    Oil price; Macro economic determinants of economic growth; Morocco;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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