Cyclicality of Public Spending Theoretical and Methodological Approach Case of Morocco

Abstract

This article is a contribution to the analysis of the impact of fiscal policy on economic activity in Morocco. It provides a concise overview of the literature on fiscal policy. Reviewing both theoretical and empirical literature, an abundant literature focuses on the effect of spending on output and other macroeconomic variables. Some studies find that an increase in public spending has little effect on output, while others find that an expansionary fiscal policy has a positive effect on the economy, thus supporting Keynesian ideas. Most studies use data from developed countries such as the USA, Japan and Europe, but developing countries seem to have received less attention.