Measuring the Impact of Financial Development on Economic Growth in Morocco - An Empirical Study Using the ARDL Model During the Period (1988- 2014) –

Abstract

This study aims to test the empirical relationship between financial development and economic growth in Morocco during the period 1988-2014. For this reason, we used the Autoregressive Distributed Lag model (ARDL). We took the domestic credit to private sector by banks and the value of stocks traded as indicators of the financial development.

The empirical results showed that an increase in the volume of domestic credit to private sector by banks by 1% leads to an increase in real growth by about 0.4% in the long run. On the other hand, the study concluded that there is no relationship between the Casablanca stock market and growth, this may be due in part to the impact of the eviction effect of banks on the stock market. Accordingly, Morocco is required to accelerate the privatization of banks, as well as to pursue the financial reforms of the stock market in order to contribute to mobilize savings and promote long run economic growth.