Dynamic Impacts of Commodity Prices on the Moroccan Economy and Economic, Political and Social Policy Setting

Abstract

This research quantifies the dynamic impact of macroeconomic indicators such as, commodity prices, energy prices, subsidy, phosphate prices, import, export, on the Moroccan economy . Cointgration , vector autoregressive (VAR) and vector error correction (VEC) models are used to quantify the effects and causes of macroeconomic indicators on Moroccan economy. The empirical results show that phosphate prices impact, in the short-run, Moroccan merchandise exports and GDP; however, this effect remains insignificant in the long-run. Besides, The results indicate that variation of international energy and grain prices affect merchandise imports. In fact, these prices impact Moroccan imports both in the short-run and the longrun. Conversely, energy and grain prices have no effect on the Consumer Price Index (CPI). Furthermore, unit root and structural breaks analyses of the CPI confirm the resilience of the monetary policy to energy and grain prices shocks. Finally, the outcome of the study indicate that subsidies budget increase with an increasing rate. Hence, subsidies are more affected by factors other than energy and grain prices. Even thought the study is done bout Morocco, the results could be applied to the similar countries in MENA region for economic, political and social policy setting.

DOI: 10.5901/mjss.2016.v7n2p177