Conference Paper
Assessing The Fiscal-Monetary Policy Mix Effectiveness: Evidence from Morocco, Egypt and Saudi Arabia
No.
ERF29AC_58
Publisher
ERF
Date
May, 2023
Our research paper contributes to enrich empirical literature and goes beyond a single open economy analysis by proposing a multi-country assessment of the policy mix in the Middle East/North Africa (MENA) region, under the two hypotheses of monetary and fiscal dominance. We base our study on a SVAR approach performed on secondary data from 1977-2021, for three countries from the MENA region, namely Morocco, Egypt and Saudi Arabia. Our data is sourced from World Development Indicators and includes five variables: Current account balance (% of GDP) (CA), inflation rate (INF), GDP growth (annual %) (GDP), money supply (M3) and government expenditure (GEXP). The results show that the coordination scheme choice has no significant effect on the policy mix effectiveness in the three countries. Policy mix in Morocco is more effective in preserving price stability whereas stabilisation policies in Egypt are more effective in boosting economic activity. Because of its limited exposure to energy price risk (i.e. imported inflation), Saudi Arabia has a wider margin of manoeuvre in implementing growth-oriented policies without imperiling price stability.
Authors
Younes El Khattab
Professor of Economics, Hassan II University, Casablanca
Authors
Rachida El Yamani
Professor of Economics and Econometrics, Hassan II...
Authors
Ahmed Hefnaoui
Professor of Macroeconomics and Econometrics, Hassan II...