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Can we speak about a real positive side effect of Compensation Fund, regarding the inflation dynamics? The case of the Moroccan economy

M. Boumhil, A. Amar

Abstract


World has recently experienced a real food and fuel crisis, due especially to the unprecedented rise in world commodity prices which causes among others, a direct impact on imports and consumer prices. In Moroccan economy case, the impact of the crisis felt particularly in compensation expenses. In fact, subsidies to the prices of commodities are necessary and play a regulatory role. Some economists evoke that they contribute to maintaining inflation at a low level. But in reality, such a mechanism merely postpones inflation over time. So, an urgent reform of the Compensation Fund should be done in the framework of an approach oriented towards social investment. In this context, the present paper intends to contribute to debate on Compensation Fund, by determining the real impact of subsidies on the dynamics of inflation in Moroccan economy case.

Keywords


Inflation, Compensation Fund, Co-integration, Subsidies.

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