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Journal of Economic Integration 2016 March;31(1) :65-102.
DOI: https://doi.org/10.11130/jei.2016.31.1.65
What Mitigates Economic Growth Volatility in Morocco?
: Remittances or FDI
Jamal Bouoiyour
Refk Selmi and 
Amal Miftah 
CATT, University of Pau, Pau, France
ESC, Tunis Business School, Manouba, Tunisia
LEDa, University of Paris-Dauphine, Paris, France
Corresponding Author: Refk Selmi ,Tel: +216 71600 615, Fax: +216 71601311, Email: s.refk@yahoo.fr
Copyright ©2016 Journal of Economic Integration
ABSTRACT
The purpose of the paper is twofold. First, it seeks to meticulously analyze the volatility of economic growth and financial flows in the case of Morocco, i.e., remittances and Foreign Direct Investment. Second, it attempts to address the effects of these financial flows on the economic growth volatility. We provide strong evidence that remittances are less volatile than Foreign Direct Investment with respect to the duration, intensity and volatility clustering. Furthermore, remittances can mitigate the volatility of growth, while Foreign Direct Investment flows amplify it. Our results do not imply that financial flows should be privileged by Moroccan authorities. In fact, our results should encourage the government to implement proactive and favourable policies geared towards productive investment.

JEL Classification
F0: General
F24: Remittances
G0: General
Keywords: Economic Growth Volatility | Remittances | FDI | Morocco | Generalized Autoregressive Conditional Heteroskedasticity (GARCH) Models
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