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Determination of the viability threshold of the external position in Morocco

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  • Fadlallah, Abdellali
  • Chakhat, Zakaria

Abstract

This paper discusses the sustainability of the moroccan current account and his assessment. To proceed, a descriptive analysis of the evolution of the current account allowed to to assimilate the behavior of its various components in connection with national and international economic conditions. As a result, it was necessary to examine the different determinants of the behavior of the current account deficit in order to understand economic policy decisions. An econometric analysis was done, in this way, we opte for a VECM that allowed to capture the long-term relationship, then we study the impact of the explanatory variables on the current account. The review of the sustainability threshold calculated by the Reisena method ensures a consistent results examination and shows that signs of unsustainability have emerged since 2008. However, it is only in 2011 that the current account shows deficits that exceed widely the optimal threshold exposing the national economy to extreme vulnerability.

Suggested Citation

  • Fadlallah, Abdellali & Chakhat, Zakaria, 2017. "Determination of the viability threshold of the external position in Morocco," MPRA Paper 83640, University Library of Munich, Germany, revised 13 Dec 2017.
    • Handle: RePEc:pra:mprapa:83640
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    References listed on IDEAS

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    More about this item

    Keywords

    Deficit of the current account ; Viability ; VECM.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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