Does Trade Openness Contribute to the Economic Growth and Development in Morocco?

This paper examines the dynamic relationship between trade liberalization on economic growth and economic development in the Kingdom of Morocco. Using yearly data obtained from the Federal Reserve Bank of Saint Luis (FRED) for the period of 1960-2018 and employing Granger Causality and an Auto-Regressive Distributed Lag (ARDL) time series model, we analyze the effects of trade openness, economic growth, and economic development. Our results suggest that trade liberalization Granger causes economic growth. Moreover, ARDL results show that trade openness has a statistically significant yet negligibly small impact on economic growth both in the short-run and in the long run. The effect of trade liberalization on economic development is not statistically significant in the short-run and long run.