Investigating the Nexus between Public Investment and Morocco’s Economic Growth through ARDL Modeling

Abstract

As a primary pillar of economic growth, public investment, which mainly covers expenditure on education, research and development as well as the infrastructure, has a strong impact on the economic development of countries. In this context, as perspectives of this research, we aim to contribute to the answer to the following questions : should moroccan public policies maintain a high level of public investment to support the economic growth ? What place should they give to private investment in this equation, and what role do inflation and education investment play in the relationship between public investment and growth ?

Thus, based on the endogenous growth theory, we explore the link between public investment and growth in the moroccan context over the period 2004-2020th. For this purpose, we use the ARDL (Auto-Regressive Distributed Lag) model to test the cointegration relationship between these two variables. As control variables of the model, we use foreign direct investment, inflation, and education investment. The key points of this study are the analysis of the effect (positive/negative) and (significant/non-significant) of public investment on economic growth.