Monetary Conditions Index: Empirical Study

Naitdouch Kaoutar; Maarouf Abdelouahab

doi:10.57239/PJLSS-2025-23.1.00706

Author(s)

Naitdouch Kaoutar Faculty of Law and Social Sciences Agdal mohamed V University of Rabat - Morocco

Maarouf Abdelouahab Faculty of Law and Social Sciences Agdal mohamed V University of Rabat - Morocco

Abstract

The purpose of this study is to construct a monetary conditions index (MCI) for the Moroccan economy based on the real exchange rate and the real interest rate, in order to estimate the respective importance of each of these two variables in the orientation of monetary policy and hence the impact of this policy on real activity and the level of inflation. The results obtained, based on a Structural VAR using quarterly data from the 1st quarter of 2000 to the 4th quarter of 2019, show us the role of the exchange rate is apparent when the index focuses on the variation of the inflation rate, whereas the demand equation is mainly driven by the variation of the interest rate. .

Publication Details

Page(s) 9022-9033

DOI 10.57239/PJLSS-2025-23.1.00706

Published Journal: Pakistan Journal of Life and Social Sciences, Volume: 23, Issue: 1, Year: 2025

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Keywords

Monetary Conditions Index Monetary Policy Real Interest Rate Real Exchange Rate Structural Var

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