The impact of budget and fiscal policies on economic growth: empirical evidence from Morocco

Abstract

With the emergence of the Keynesian model, the role of the state has increased through its economic policies, especially about its financial policies. This is due to the effectiveness of these policies in achieving the state’s economic target. The importance of its tools is embodied in public spending, which affects national economic activity in terms of consumption, savings, and investment.

The fiscal policy defines the set of actions that the government can take, which are depicted in the following parts. The first part will be devoted to a theoretical model for a more complete discussion of budget and fiscal policy.

The second part will be devoted to the study of the fiscal’s influence and tax policy on Moroccan economic growth through both an empirical and econometric study. In addition, through an applied study in which we rely on statistical studies. Using the VAR model and Eviews 10 software,

We conclude that there is indeed an impact of fiscal policy and tax policy on Moroccan economic growth.

Second, budget and tax policy can be catalysts for private investment and an increase in public spending by the state.

If we take into account the results obtained from this research, we can make the following recommendations: The State must take into account financial and fiscal measures in the first place to increase investment and realize the budget and thus achieve economic growth

Secondly, the State must be aware of the importance of budgetary and fiscal policies in achieving the major balances of the State. As we know, tax revenues represent an important resource for the state treasury, but it should not be forgotten that high tax revenues can lead to lower investments, whether private or public.

Keywords: Fiscal policy, Economic growth, Budget policy, VAR model, Morocco

JEL Classification: H61 O11 O23 R28

Paper type: Empirical research