Assessing the Impact of Structural Reforms on Potential Output: The Case of Morocco

By Hippolyte W. Balima, Olivier Bizimana, Ananta Dua

October 27, 2023

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Hippolyte W. Balima, Olivier Bizimana, and Ananta Dua. Assessing the Impact of Structural Reforms on Potential Output: The Case of Morocco, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper assesses Morocco’s potential output and the scope for structural reforms to reverse the downward trend in economic performance observed since the Global Financial Crisis. Using multivariate filtering (MVF) techniques, our analysis finds that the downward secular trend in potential growth was primarily driven by the decline in the contribution of labor inputs. We then combine production function and general equilibrium model approaches to provide estimates of the potential macroeconomic impact of Morocco’s structural reform agenda. The results suggest that the planned structural reforms could deliver sizable output gains in the medium to long term with reforms that would reduce the large gender gap in Morocco’s labor market yielding the greatest payoffs.

Subject: Labor, Labor force participation, Macrostructural analysis, Potential output, Production, Production growth, Structural reforms, Total factor productivity

Keywords: Case of Morocco, Dynamic stochastic general equilibrium models, Economic growth, Fiscal policy, Global, Labor force participation, Morocco, Morocco's agenda, Multivariate filter, Potential output, Production function approach, Production growth, Productivity, Reform multiplier, Structural reform agenda, Structural reforms, Total factor productivity

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2023/222
Stock No:

WPIEA2023222
ISBN:

9798400258411
ISSN:

1018-5941

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