Advances in Management and Applied Economics

Inflation targeting in Morocco: a VAR model analysis

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  • Abstract

    The aim of our work is to conduct a descriptive analysis of the inflation targeting regime. In this context, we will analyze the theoretical underpinnings of the inflation targeting. Initially, we will define the inflation targeting and the motivations for its appearance. Then, we will analyze the prerequisites and the necessary steps for the implementation of this regime, as well as its advantages and disadvantages. In a second step, we will evaluate the adoption of inflation targeting by emerging countries by referring to the study carried out by Scott ROGER. Also, we will verify that Morocco validates the conditions necessary for the implementation of inflation targeting. In order to analyze the impact of the inflation targeting regime on the Moroccan economy, we will proceed to a VAR model analysis aiming to identify the most significant variables which interfere in the implementation of this new monetary policy in Morocco.

    JEL classification numbers: E31, E52, C32.
    Keywords: Inflation targeting, inflation, exchange rate, VAR.