Empirical analysis of the external determinants of the budget deficit: Case of Morocco

Authors

  • Mohamed LAKHDAR Faculty of Law, Economics and Social Sciences Kenitra
  • Aziz BENSBAHOU

DOI:

https://doi.org/10.31695/IJASRE.2020.33918

Keywords:

Budget Balance, Commercial Opening, Real Effective Exchange Rate, Oil Price, VAR Model.

Abstract

This work aims to examine the effect of external variables on the budget balance in Morocco using annual data for the period (1980-2016). The empirical results of the estimation of the VAR model show that the external variables have direct and indirect effects on the budget balance. A positive oil price shock does not have a significant influence on the budget balance in the short term. But, its indirect long-term effect is significant. Furthermore, a positive shock to the real effective exchange rate generates a widening budget deficit. The degree of trade openness has a positive effect on the fiscal balance in the short and long term.

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Published

2020-11-10

How to Cite

LAKHDAR, M., & BENSBAHOU, A. (2020). Empirical analysis of the external determinants of the budget deficit: Case of Morocco . I. J. Of Advances in Scientific Research and Engineering-IJASRE (ISSN: 2454 - 8006), 6(11), 10-19. https://doi.org/10.31695/IJASRE.2020.33918