The effects of Trade Liberalization on the Consumption Function in Morocco

Abstract

This paper investigates the 1983 trade liberalization and inflation on the consumption function of Morocco. Findings indicate that trade liberalization and moderate inflation had little impact on consumption. The results do, however, show strong support for the permanent income hypothesis because lagged consumption was found to be significant in predicting current consumption.

Key Words: Morocco, trade liberalization, inflation, consumption.

African Journal of Finance and Management Vol.10(1) 2001: 23-28