A Simple Macrofiscal Model for Policy Analysis: An Application to Morocco

By Daniel Baksa, Ales Bulir, Roberto Cardarelli

July 16, 2021

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Daniel Baksa, Ales Bulir, and Roberto Cardarelli. A Simple Macrofiscal Model for Policy Analysis: An Application to Morocco, (USA: International Monetary Fund, 2021) 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

The paper describes a semistructural macrofiscal approach to simulating and forecasting macroeconomic policies. The model focuses on only a few variables that are consistent with the New Keynesian framework. Thanks to its simplicity, it facilitates an initial and intuitive understanding of monetary and fiscal policy transmission channels, and their main impact on economic activity. The model is adapted to Morocco and we demonstrate its application with an illustrative scenario of policy responses to a slower-than-expected recovery from the Covid-19 pandemic, under different monetary policy and exchange rate regimes.

Subject: Exchange rate arrangements, Foreign exchange, Inflation targeting, Monetary policy, Output gap, Production, Public debt, Real exchange rates

Keywords: B. aggregate supply, Exchange rate arrangements, Fiscal Multiplier, Fiscal Policy, Fiscal policy transmission channels, Fiscal policy transmission mechanisms, Global, Inflation targeting, Maghreb, Morocco, Output gap, Peg regime, Policy reaction function, Real exchange rates

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/190
Stock No:

WPIEA2021190
ISBN:

9781513592985
ISSN:

1018-5941

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