Identifying and characterising the business cycle: the case of Morocco

Abstract

This paper analyses the key features of the Moroccan business cycles during the period 1980:q1–2012:q1. The chronologies in classical and growth cycles, expansion and contraction phases, and full cycles in real gross domestic product are identified. Using the modified Bry–Boschan algorithm, eight business cycles were found and the ninth is not yet achieved. Then, the main features in these cycles are analysed by applying the method of Harding and Pagan [2002. “Dissecting the Cycle: A Methodological Investigation.” Journal of Monetary Economics 49: 365–381]. This method has shown that the Moroccan economy characterised by the average cumulative gain is more important than the cumulative loss and by the domination of expansion phases.

Keywords:

• classical cycle
• growth cycle
• HP filter
• Morocco

JEL Classification:

• E23
• E30
• E32

Acknowledgements

Special thanks to anonymous reviewers for their valuable remarks and comments.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 For more details, see the website of the Ministry of Industry, Trade and New Technologies, Morocco, http://www.mce.gov.ma

2 This agreement entered into effect in March 2000, which aims to establish a free exchange zone industrial to deepen the exchange liberalisation in agricultural and fishery, to liberalise the exchange in services, and to strengthen the exchange integration.

3 This agreement entered into effect in January 2006, which applies to all sectors of economic activity (agricultural, industrial and textile, and services).

4 This agreement entered into effect in January 2006, which covers the exchange of the goods. A clause in the Agreement provides for the progressive liberalisation of agricultural exchanges and the liberalisation of the exchange of the services.

5 This agreement was signed among Morocco, Egypt, Tunisia, and Jordan. It aims at the institution of a free exchange zone, development of industrial exchange, promotion of economic activity and employment, productivity improvement, coordination of the global and the sectorial economy, and harmonisation of legislation of member countries in the economic field.

6 The lack of investment and the no-access to social services, such as education and health, are the bigger problems in Morocco. For example, the maternal death rate in 2010 is the highest in rural areas (148 maternal mortality per 100,000 live births) than that in urban areas (73 maternal mortality per 100,000 live births) and the literacy rate is only of 44% in rural areas; see report of HCP (2010), Morocco.

7 For more explication and interpretation see Stock and Watson (1999).

8 There are many other methods to use. See Bonenkamp, Jacobs, and Kuper 2001, for a presentation and comparison of different methods of business cycle dating both on theoretical and practical grounds.

9 For a detailed overview of the procedure, see Bry and Boschan, 1971, 7–63.

10 For the detail of construction of approximate band-pass filters, see Section 2, Baxter and King (1999).

11 Special thanks to Everts Martin and Robert Inkaar for their helps in providing me the program MATLAB.

12 See Athanasopoulos, Anderson and Vahid (2001) for more explication.

13 The value added of manufacturing represents 14% of GDP. The export of this product represents between 20% and 35% of total exports.

14 The value added of agriculture represents 15% of GDP. The export of this product represents between 8% and 11% of total exports.