Nexus of Asymmetric Variations in Oil Prices and Inflation in Morocco: An Econometric Study Using the NARDL Model

Abstract

This study examines the impact of asymmetric oil price fluctuations on inflation in Morocco over the period 1998Q1–2022Q4. Given the country’s dependence on imported energy, it employs the Nonlinear Autoregressive Distributed Lag (NARDL) model to investigate the short- and long-run asymmetric effects of oil price shocks. The results reveal that positive oil price shocks significantly increase inflation in the short run, whereas their effects weaken in the long run. The findings also indicate that oil price increases generate stronger inflationary pressures than oil price decreases. Furthermore, the exchange rate acts as an indirect transmission channel with a limited and lagged effect. These results highlight the importance of strengthening energy resilience and the macroeconomic framework to mitigate inflationary pressure.