Overview

This thesis aims to analyze the relationship between inflation and economic growth in Morocco, using an original approach that combines theory and practice. The analysis of quarterly data from 2000 to 2019 using the threshold model revealed that there is no linear relationship between these two variables. The results identified an inflation rate of 3% as optimal. The inflation threshold above which inflation significantly and negatively affects economic growth in Morocco is around 3% inflation, with a statistically insignificant positive effect below this threshold. However, the negative effect of the relationship between these two aggregates is amplified as the inflation threshold rises above 3%. These results indicate that Moroccan monetary authorities can slightly relax the constraints of the monetary rules on the inflation rate set at an implicit threshold below 2%.