Impact of income inequality on socio-economic developpement in morocco : Evaluation using a micro-macro analysis (CGE Model)

Abstract - Although the world has experienced increased affluence, disparities among its inhabitants have continued to rise, reshaping our understanding of the concept of "poverty". This executive summary of my thesis dissertation presents a condensed version of a comprehensive theoretical and empirical inquiry into the socioeconomic ramifications of income inequality on the stability of a developing economy, specifically the Moroccan economy. The theoretical segment of this research involves an exploration of the underlying theories surrounding income inequality in order to conceptualize its influence on economic advancement. The empirical component is bifurcated into two distinct phases, an exploratory phase and a modeling phase. The former stage is concerned with assessing the dynamic nature of inequality in Morocco and identifying the factors contributing to its growth. The latter phase employs a static ECG model, calibrated on Moroccan SAM 2016, to simulate multiple scenarios in order to scrutinize the socioeconomic impacts of a mere 1% increase in income inequality. Our results reveal that a 1% increase in inequality precipitates a 1.73% decline in GDP. Keywords : Income inequality, socioeconomic impact, developing economy, fiscal policy, CGE model. JEL CODE : C68, D63, E62, H31 Note - This executive summary highlights the key findings of the author's thesis. The research was presented at the annual Global Economic Analysis Conference, organized by the Global Trade Analysis Project (GTAP) in collaboration with UNECA, and published in the Scopus-indexed journal Statistika (Issue 1/2023, March 17, 2023).