Spillovers from Europe into Morocco and Tunisia, IMF, by Reinout De Bock, Daniel Florea, and Joël Toujas-Bernaté. This paper examines the economic and financial linkages between Morocco and Tunisia and their European partners. Using structural vector autoregressions, we find that growth shocks in European partner countries generate significant responses on growth in Morocco and Tunisia. For Tunisia, exports and, to a much lesser extent, tourism appear to be the major transmission channels. In Morocco, exports, remittances and tourism play relatively equal roles. An analysis with sectoral data supports these results.

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Reinout De Bock, Daniel Florea, and
Joël Toujas-Bernaté
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WP/10/238

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IM F Working Paper
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Spillovers from Europe into Morocco and Tunisia1
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Prepared by Reinout De Bock, Daniel Florea, and Joël Toujas-Bernaté
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Abstract!
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This Working Paper should not be reported as representing the views of the IM F.!
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II. BA C K GR OUND AND DA T A DESCRIPTION
A. Economic Policy and Links with Partner Countries
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G)&34()!3##)&32E!&+!0E(!-.)&#(3/!V/$&/!S-VT!0&O3)4*!O$4(/$/R!$0*!)(%30$&/*!O$0E!/($REG&)$/R!
2&./0)$(*!+)&,!0E(!*&.0E!&+!0E(!1(4$0())3/(3/!3/4!3$,$/R!30!0E(!%&/RK0(),!&GJ(20$'(!&+!G.$%4$/R!
3!-.)&K1(4$0())3/(3/!(2&/&,$2!3)(3U!5E(!$,#%(,(/030$&/!&+!0E(!3**&2$30$&/!3R)((,(/0*!
#)&4.2(4!$,#&)03/0!2E3/R(*!+&)!0E(!0O&!(2&/&,$(*U!"$/2(!0E(/!0)34(!+%&O*!$/2)(3*(4!
(P#&/(/0$3%%;!S<$R.)(!9TU!
!C%0E&.RE!&0E()!+320&)*W!*.2E!3*!R%&G3%$F30$&/!3/4!*0).20.)3%!)(+&),*!
34&#0(4!$/!G&0E!1&)&22&!3/4!5./$*$3!3+0()!7888W!3)(!3%*&!30!#%3;W!0E(!$,#320!&+!0E(!3**&2$30$&/!
3R)((,(/0*!&/!G&0E!2&./0)$(*!3##(3)*!0&!G(!*$R/$+$23/0U!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!V/%(**!&0E()O$*(!*#(2$+$(4W!G;!(P#&)0*W!O(!./4()*03/4!(P#&)0*!&+!R&&4*U!

6. !
!
<$R.)(!9U!5&03%!:,#&)0*!3/4!-P#&)0*!!
S1$%%$&/*!&+!V"DW!9ee8i788AT!
! !
"&.)2([!B&./0);`*!3.0E&)$0$(*]!3/4!:1<!*03++!(*0$,30(*U!
-P#&)0*W!0&.)$*,!3/4!)(,$003/2(*!3)(!*$F3G%(!$/!G&0E!1&)&22&!3/4!5./$*$3W!3%0E&.RE!0E($)!
$,#&)03/2(!'3)$(*!G(0O((/!0E(!0O&!2&./0)$(*!S<$R.)(!7TU!b(%30$'(!0&!cD>W!(P#&)0*!3)(!
*.G*03/0$3%%;!E$RE()!$/!5./$*$3!0E3/!$/!1&)&22&U!:/!2&/0)3*0W!0&.)$*,!3/4!)(,$003/2(*!3##(3)!0&!G(!
,&)(!$,#&)03/0!$/!1&)&22&U!<&)!(P3,#%(W!0E(!)30$&!&+!)(,$003/2(*!0&!cD>!$/!1&)&22&!$*!4&.G%(!
0E(!)30$&!$/!5./$*$3U!!
<$R.)(!7U!"E3)(*!&+!-P#&)0*W!5&.)$*,W!3/4!b(,$003/2(*W!788A!!
S:/!#()2(/0!&+!cD>T!!
"&.)2([!B&./0);`*!3.0E&)$0$(*]!3/4!:1<!*03++!(*0$,30(*U!
!
!
!
0
10000
20000
30000
40000
50000
Exports FOB
Imports CIF
Exports to the EU
(a) Morocco
Association
Agreement
with the EU
0
10000
20000
30000
Exports FOB
Imports CIF
Exports to the EU
(b) Tunisia
Association
Agreement
with the EU
22.4
8.0 8.7
0.0
10.0
20.0
30.0
40.0
50.0
Exports Tourism Remittances
(a) Morocco
42.7
6.1
4.4
0.0
10.0
20.0
30.0
40.0
50.0
Exports Tourism Remittances
(b) Tunisia

7. ! g!
Box 1. Association Agreements
(a) The Association Agreement Between Morocco and the European Union
5E(!-VK1&)&22&!C**&2$30$&/!CR)((,(/0!O3*!*$R/(4!$/!<(G).3);!9eegW!3/4!(/0()(4!$/0&!+&)2(!$/!13)2E!
7888W!+&%%&O$/R!$0*!)30$+$230$&/!G;!0E(!>3)%$3,(/0*!&+!0E(!-V!1(,G()!"030(*W!0E(!-.)&#(3/!>3)%$3,(/0!3/4!
0E(!1&)&223/!>3)%$3,(/0U!!
5E(!CR)((,(/0!3$,*!30!R)34.3%%;!2)(30$/R!3!+)((!0)34(!3)(3!+&)!$/4.*0)$3%!#)&4.20*U!5E(!-V!2&,,$00(4!0&!
R$'(!$/*03/03/(&.*%;!+)((!322(**!0&!#)&4.20*!&)$R$/30$/R!+)&,!1&)&22&W!OE$%(!1&)&22&!$,#%(,(/0(4!3!
R)34.3%!4$*,3/0%$/R!&+!$0*!0)34(!03)$++*W!322&)4$/R!0&!3!*#(2$+$2!*2E(4.%(U!<.)0E(),&)(W!#)&R)(**$'(!3/4!
)(2$#)&23%!%$G()3%$F30$&/!&+!0)34(!+&)!3!/.,G()!&+!3R)$2.%0.)3%!#)&4.20*!*03)0(4!$/!H3/.3);!788^U!5E(!
CR)((,(/0!3%*&!$/2%.4(*!#)&'$*$&/*!&/!+)((4&,!&+!(*03G%$*E,(/0!3/4!0E(!%$G()3%$F30$&/!&+!*()'$2(*W!3/4!
+)((!,&'(,(/0!&+!23#$03%!3/4!2&,#(0$0$&/!).%(*U!<)&,!3!#&%$0$23%!#()*#(20$'(W!)(*#(20!+&)!E.,3/!)$RE0*!
3/4!4(,&2)30$2!#)$/2$#%(*!2&/*0$0.0(*!3/!(**(/0$3%!(%(,(/0!&+!0E(!CR)((,(/0U!5E(!0(P0!(X.3%%;!)(+()*!0&!
)(R.%3)!#&%$0$23%!4$3%&R.(!30!*(/$&)!&++$2$3%!%('(%!&/!#(32(W!*(2.)$0;W!3/4!)(R$&/3%!2&K&#()30$&/U!C/&0E()!
$,#&)03/0!2E3#0()!&+!0E(!C**&2$30$&/!CR)((,(/0!)(+()*!0&!0E(!X.(*0$&/!&+!,$R)30$&/!3/4!*&2$3%!3++3$)*U!
<&%%&O$/R!0E(!(/0);!$/0&!+&)2(!&+!0E(!3R)((,(/0W!3!2&/*03/0!4$3%&R.(!30!1$/$*0()$3%!3/4!(P#()0!%('(%!&/!
,$R)30$&/!3/4!)(%30(4!3)(3*!E3*!G((/!E(%4U!!
:/!788AW!1&)&22&!&G03$/(4!m34'3/2(4!*030.*m!)(%30$&/*W!3!,&'(!OE$2E!#)&'$4(*!R)(30()!322(**!0&!0E(!-Vk*!
$/0()/3%!,3)Q(0!3/4!OE$2E!#%32(*!1&)&22&!3!/&02E!3G&'(!0E(!,(,G()*!&+!0E(!m/($REG&)E&&4!#&%$2;Um!
V/4()!0E(!0(),*!&+!0E(!34'3/2(4!*030.*W!1&)&22&!O$%%!3%*&!#3)0$2$#30(!$/!-.)&#(3/!2$'$%!3/4!,$%$03);!2)$*$*!
,3/3R(,(/0!&#()30$&/*W!3*!O(%%!3*!$/!3!/.,G()!&+!-.)&#(3/!3R(/2$(*W!*.2E!3*!-.)&#&%W!0E(!-.)&#(3/!C$)!
"(2.)$0;!CR(/2;W!3/4!0E(!-.)&#(3/!1&/$0&)$/R!B(/0()!+&)!D).R*!3/4!D).R!C44$20$&/U!
(b) The Association Agreement between Tunisia and the European Union
5./$*$3!*$R/(4!3!G$%30()3%!C**&2$30$&/!CR)((,(/0!O$0E!0E(!-V!$/!H.%;!9ee!3/4!$,#%(,(/0(4!$0!$/!13)2E!
9eeAU!C/!3,(/4,(/0!2&'()$/R!3R)$2.%0.)3%!#)&4.20*!O3*!$,#%(,(/0(4!&/!H3/.3);!9W!7889U!!
5E(!CR)((,(/0!E3*!0E)((!,3$/!+(30.)(*U!<$)*0W!$0!%$G()3%$F(4!0)34(!)(%30$&/*!0E)&.RE!0E(!$,,(4$30(!
3G&%$0$&/!&+!X.3/0$030$'(!)(*0)$20$&/*!3/4!3!R)34.3%!)(4.20$&/!&+!0)34(!G3))$()*!OE$2E!2.%,$/30(4!$/!+)((!
0)34(!+&)!$/4.*0)$3%!R&&4*!$/!788AU!5)34(!%$G()3%$F30$&/!#()03$/$/R!0&!3R)$2.%0.)(!#)&4.20*!3/4!/(R&0$30$&/*!
0&!%$G()3%$F(!0E(!0)34(!&+!*()'$2(*!3)(!*0$%%!&/R&$/RU!"(2&/4W!$0!2&/0)$G.0(4!0&!E3),&/$F$/R!5./$*$3`*!
)(R.%30&);!+)3,(O&)Q!O$0E!0E(!&/(!$/!#%32(!$/!0E(!-VW!#3)0$2.%3)%;!+&)!0)34(K)(%30(4!#&%$2$(*W!/&),*!3/4!
*03/43)4*!$/2%.4$/R!$/!0)3/*#&)0!3/4!0(%(2&,,./$230$&/*W!322&./0$/R!3/4!+$/3/2$3%!*()'$2(*W!3/4!*030$*0$2*U!
5E$)4W!$0!#)&'$4(4!*.##&)0!+&)!*(20&)*!+32$/R!,&)(!4$++$2.%0$(*!0&!34J.*0!0&!0E(!0)34(!%$G()3%$F30$&/!S0E(!
n,$*(!o!/$'(3.” pr&R)3,T!3/4!(/E3/2(4!2&&#()30$&/W!/&03G%;!$/!0E(!4('(%&#,(/0!&+!$/+)3*0).20.)(U!
5E(!-.)&#(3/!Z($REG&)E&&4!>&%$2;!G.$%4*!&/!0E(!C**&2$30$&/!CR)((,(/0!G;!+&2.*$/R!0E(!G$%30()3%!
2&&#()30$&/!G(0O((/!5./$*$3!3/4!0E(!-V!&/!,&)(!03)R(0(4!#)&R)3,*U!:0!O3*!4('(%&#(4!$/!788^!3/4!
2&/2%.4(4!O$0E!5./$*$3!$/!788U!:0!#)&'$4(*!$/2)(3*(4!+$/3/2$3%!*.##&)0!3/4!+3'&)*!(/E3/2(4!)(R$&/3%!
2&&#()30$&/!+&)!0)34(!$/0(R)30$&/!3/4!0E(!4('(%&#,(/0!&+!$/+)3*0).20.)(!S#3)0$2.%3)%;!+&)!(/()R;W!0)3/*#&)0W!
3/4!$/+&),30$&/!0(2E/&%&R;T]!$,#)&'(,(/0*!$/!0E(!G.*$/(**!2%$,30(!S#3)0$2.%3)%;!0E)&.RE!*0)(3,%$/(4!
03P30$&/!3/4!2.*0&,*!#)&2(4.)(*W!3/4!*0)(/R0E(/(4!$/0(%%(20.3%!3/4!#)&#()0;!)$RE0*T]!3/4!3!2&/*&%$430(4!
,32)&(2&/&,$2!+)3,(O&)QU!
!
5E(!-V!$*!0E(!,3$/!4(*0$/30$&/!&+!(P#&)0*!+&)!G&0E!1&)&22&!3/4!5./$*$3!S<$R.)(!@TU!5E(!-V`*!
3'()3R(!*E3)(!$/!1&)&223/!(P#&)0*!+&)!0E(!#()$&4!788i8A!O3*!h8!#()2(/0U!<&)!5./$*$3!0E$*!*E3)(!
$*!*%$RE0%;!E$RE()W!30!hh!#()2(/0U!5E(!-V!#%3;*!3/!('(/!,&)(!#)&,$/(/0!)&%(!OE(/!$0!2&,(*!0&!

8. ! h!
0&.)$*,!3/4!)(,$003/2(*U!5E(!3'()3R(!*E3)(*!+&)!0&.)$*,!)('(/.(*!3/4!)(,$003/2(*!&)$R$/30$/R!
+)&,!0E(!-V!4.)$/R!0E(!*3,(!#()$&4!S788i8AT!3)(!G(0O((/!A8!#()2(/0!3/4!e8!#()2(/0U!
1&)(&'()W!0E(*(!*E3)(*!3##(3)!0&!G(!)(%30$'(%;!*03G%(!&'()!0$,(U!
<$R.)(!@U!-V!"E3)(*!$/!-P#&)0*W!5&.)$*,!3/4!b(,$003/2(*!!
S:/!#()2(/0W!3'()3R(!788i8AT!
!
"&.)2([!B&./0);`*!3.0E&)$0$(*]!3/4!:1<!*03++!(*0$,30(*!
!
N0E()!2E3//(%*!,$RE0!3%*&!G(!(P#%&)(4!0&!(P3,$/(!0E(!$/0())(%30$&/!G(0O((/!0E(!-.)&#(3/!V/$&/!
3/4!1&)&22&!3/4!5./$*$3`*!(2&/&,$(*W!*.2E!3*!$,#&)0*W!+&)($R/!4$)(20!$/'(*0,(/0!S<D:T!+%&O*W!
3*!O(%%!3*!+$/3/2$3%!%$/Q3R(*U!b(R3)4$/R!<D:W!3%0E&.RE!0E(*(!+%&O*!3)(!R(/()3%%;!'&%30$%(W!<$R.)(!
^!*.RR(*0*!0E30!0E(;!)(#)(*(/0!3!#&0(/0$3%%;!$,#&)03/0!0)3/*,$**$&/!2E3//(%!G(0O((/!0E(!-V!3/4!
0E(!1&)&223/!3/4!5./$*$3/!(2&/&,$(*U!=(!2&/*$4()!E&O('()!0E30!0E(!(++(20!&+!<D:!$*!,3$/%;!
*0).20.)3%!3/4!,3/$+(*0*!$0*(%+!$/!0E(!,(4$.,!0&!%&/R!0(),U!C*!*.2EW!$0!$*!%(**!*.$0(4!+&)!3/!
3/3%;*$*!2(/0()(4!&/!G.*$/(**!2;2%(*!2&))(%30$&/*U!!
<$R.)(!^U!<D:!$/!1&)&22&!3/4!5./$*$3!!
SC'()3R(!788i8AT!
"&.)2([!B&./0);`*!3.0E&)$0$(*]!3/4!:1<!*03++!(*0$,30(*U! !
EU
70
EU
79
EU
87
Other
30
Other
21
Other, 13
0%
20%
40%
60%
80%
100%
Exports Tourism Remittances
(a) Morocco
EU
77
EU
85
EU
88
Other
23
Other, 15 Other, 12
0%
20%
40%
60%
80%
100%
Exports Tourism Remittances
(b) Tunisia
4.9
6.2
0
2
4
6
8
10
Morocco Tunisia
(a) In percent of GDP
EU
80
EU
58
Other
20
Other
42
0%
20%
40%
60%
80%
100%
Morocco Tunisia
(b) EU share in total FDI

9. ! A!
5.)/$/R!0&!0E(!0)3/*,$**$&/!&+!*E&2Q*!0E)&.RE!+$/3/2$3%!2E3//(%*W!0E(!1&)&223/!3/4!5./$*$3/!
G3/Q$/R!*;*0(,*!E3'(!%$,$0(4!%$/Q*!O$0E!$/0()/30$&/3%!,3)Q(0*U!L3/Q$/R!320$'$0$(*!3)(!+./4(4!$/!
%3)R(!#3)0!O$0E!4&,(*0$2!4(#&*$0*!Sh!#()2(/0!&+!G3/Q*`!)(*&.)2(*!$/!1&)&22&!3/4!A8!#()2(/0!$/!
5./$*$3T!3/4!2)&**KG&)4()!+$/3/2$/R!$*!*,3%%U!:/!788e!*E&)0K0(),!+&)($R/!%$3G$%$0$(*!&+!1&)&223/!
3/4!5./$*$3/!G3/Q*!0&!(P0()/3%!2&./0()#3)0*!)(#&)0(4!0&!0E(!L3/Q!+&)!:/0()/30$&/3%!"(00%(,(/0*!
SL:"T!)(#)(*(/0(4!&/%;!@U@!3/4!9U7!#()2(/0!&+!0E($)!)(*#(20$'(!cD>!S53G%(!9TU!1&)(&'()W!$/!G&0E!
2&./0)$(*!0E(!23#$03%!322&./0!$*!&/%;!#3)0$3%%;!&#(/U!"('()3%!)(*0)$20$&/*!3##%;!0&!0)3/*320$&/*!$/!
+&)($R/!2.))(/2;W!+&)($R/!G&))&O$/R!3/4!+&)($R/!$/'(*0,(/0!G;!4&,(*0$2!+$),*!SL&P!7TU!!
!
53G%(!9U!L3/Q*`!-P0()/3%!D(G0!"030$*0$2*W!7888i8e!
S:/!#()2(/0!&+!cD>T!
!!
"&.)2([!L3/Q!+&)!:/0()/30$&/3%!"(00%(,(/0*W!B&./0);!3.0E&)$0$(*]!3/4!:1<!*03++!23%2.%30$&/*U!
<&)($R/!G3/Q*!E3'(!/&/K/(R%$R$G%(!#)(*(/2(*!$/!0E(!0O&!2&./0)$(*`!G3/Q$/R!*;*0(,*U!13J&)$0;K
&O/(4!+&)($R/!G3/Q*!322&./0(4!+&)!79U^!#()2(/0!&+!0&03%!G3/Q$/R!3**(0*!$/!1&)&22&!S788AT!3/4!
+&)!7eU^!#()2(/0!$/!5./$*$3!S788eTU!5E$*!#)(*(/2(!,$RE0!#%3;!3!)&%(!$/!0(),*!&+!$/2)(3*(4!
2&,#(0$0$&/W!$,#)&'(4!G3/Q$/R!#)320$2(*!3/4!4$'()*$+$230$&/!&+!+./4$/R!*&.)2(*!G.0W!3*!$/!0E(!
23*(!&+!$,#&)0*!3/4!<D:*W!0E(*(!(++(20*!3)(!,&)(!%$Q(%;!0&!3##(3)!$/!0E(!%&/R!)./U!Z('()0E(%(**W!
0E(!$,#320!&+!0E(!&#(/$/R!&+!0E(!4&,(*0$2!,3)Q(0!0&!+&)($R/!G3/Q*!$/!1&)&22&!3/4!5./$*$3!$*!3!
*.GJ(20!0E30!4(*()'(*!3!,.%0$#%(K3/R%(4!3/3%;*$*!OE$2E!R&(*!G(;&/4!0E(!#.)#&*(!&+!&.)!#3#()U!
!
! !
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Morocco
Liabilities to BIS banks 17.7 16.1 15.3 11.9 10.8 8.9 7.5 7.9 8.4 9.8
S‐T Liabilities to BIS banks 4.8 5.3 4.7 2.7 2.6 2.6 3.2 2.9 2.1 3.3
Tunisia
Liabilities to BIS banks 7.7 7.0 7.2 7.3 7.5 5.6 6.1 5.7 5.2 4.8
S‐T liabilities to BIS banks 2.6 2.0 1.7 1.7 1.7 1.5 2.0 1.4 1.2 1.2

10. ! e!
!
Box 2. Some of the Remaining Restrictions on Foreign Currency
Transactions and Capital flows
(a) Morocco
1&)&223/!(P#&)0()*!&+!R&&4*!3/4!*()'$2(*!,3;!&#(/!+&)($R/!(P2E3/R(!322&./0*!4&,(*0$23%%;!3/4!
4(#&*$0!.#!0&!8!#()2(/0!&+!0E(!)(#30)$30(4!+&)($R/!(P2E3/R(!)(2($#0*!+)&,!(P#&)0*U!<&)($R/!)(*$4(/0*!
3/4!2&)#&)30$&/*!,3;!&#(/!+&)($R/!(P2E3/R(!322&./0*!O$0E&.0!%$,$030$&/*U!!
B&,,()2$3%!G3/Q*!,3;!G&))&O!3G)&34!&/%;!0&!+$/3/2(!+&)($R/!0)34(!&)!$/'(*0,(/0!&#()30$&/*!&/!
G(E3%+!&+!2.*0&,()*!&)!3*!#3)0!&+!0E(!$/0)&4.20$&/!&+!0E(!+&)O3)4!2&'()!+&)!2.*0&,()*`!+&)($R/!
(P2E3/R(!*O3#*W!O$0E!,30.)$0$(*!(X.3%!0&!0E(!4.)30$&/!&+!0E(!E(4R$/R!&#()30$&/*!&++()(4U!!
5E()(!3)(!/&!2&/0)&%*!&/!$/O3)4!4$)(20!$/'(*0,(/0U!N.0O3)4!4$)(20!$/'(*0,(/0*!3)(!*.GJ(20!0&!
3##)&'3%W!G.0!)(*$4(/0!2&)#&)30$&/*!$/!&#()30$&/!+&)!,&)(!0E3/!0E)((!;(3)*!G(/(+$0!+)&,!2()03$/!
+32$%$0$(*U!b(*$4(/0!+&)($R/!/30$&/3%*!3)(!+)((!0&!$/'(*0!3G)&34W!#)&'$4(4!0E(!&#()30$&/*!3)(!+$/3/2(4!
+)&,!0E($)!&O/!+./4*!3G)&34!&)!+)&,!0E($)!E&%4$/R*!4(/&,$/30(4!$/!2&/'()0$G%(!4$)E3,!&)!+&)($R/!
(P2E3/R(U!!
C!/.,G()!&+!,(3*.)(*!O()(!03Q(/!4.)$/R!788e!0&!+.)0E()!%$G()3%$F(!0E(!23#$03%!322&./0U!!
!
(b) Tunisia
>)&+(**$&/3%!322&./0*!$/!+&)($R/!2.))(/2;!,3;!G(!&#(/(4!G;!)(*$4(/0!$/4$'$4.3%*W!5./$*$3/!%(R3%!
(/0$0;!3/4!+&)($R/!%(R3%!(/0$0;!$/!5./$*$3!O$0E!+&)($R/!2.))(/2;!3**(0*!$/!2&//(20$&/!O$0E!$0*!320$'$0$(*U!
C.0E&)$F30$&/!G;!0E(!B(/0)3%!L3/Q!&+!5./$*$3!SLB5T!$*!)(X.$)(4!+&)!)(*$4(/0*!0&!&#(/!322&./0*!
3G)&34U!-P#&)0!#)&2((4*!,.*0!G(!)(#30)$30(4!O$0E$/!3!0$,(!%$,$0!+)&,!0E(!#3;,(/0!4.(!430(U!p&O('()W!
)(*$4(/0!(P#&)0()*!,3;!)(03$/!.#!0&!988!#()2(/0!&+!0E($)!+&)($R/!(P2E3/R(!(P#&)0!#)&2((4*U!
5E(!32X.$*$0$&/!&+!3**(0*!S23#$03%!3/4!,&/(;!,3)Q(0!$/*0).,(/0*T!3G)&34!G;!)(*$4(/0*!$*!*.GJ(20!0&!
3.0E&)$F30$&/U!b(*$4(/0*!3)(!3%*&!)(X.$)(4!0&!)(#30)$30(!3%%!$/2&,(!+)&,!$/'(*0,(/0!3G)&34W!3*!O(%%!3*!
3%%!#)&2((4*!+)&,!0E(!4$'(*0$0.)(!&)!%$X.$430$&/!&+!*.2E!$/'(*0,(/0*U!
"0&2Q*!$/!(P$*0$/R!2&,#3/$(*!$/!5./$*$3!,3;!G(!32X.$)(4!+)((%;!O$0E!+&)($R/!(P2E3/R(!0)3/*+())(4!
+)&,!3G)&34!G;!+&)($R/!/&/)(*$4(/0*U!p&O('()W!0E(!32X.$*$0$&/!G;!+&)($R/()*!&+!*E3)(*!O$0E!'&0$/R!
)$RE0*!$*!*.GJ(20!0&!0E(!3##)&'3%!&+!0E(!p$RE!:/'(*0,(/0!B&,,$**$&/U!Z&/)(*$4(/0*!,3;!3%*&!*(%%!
+)((%;!*E3)(*!&+!2&,#3/$(*!(*03G%$*E(4!$/!5./$*$3U!5E(;!,3;!3%*&!0)3/*+()!+)((%;!/(0!)(3%!#)&2((4*!
+)&,!0E(!*3%(!&+!*E3)(*!0E30!O()(!#.)2E3*(4!O$0E!+&)($R/!(P2E3/R(!0)3/*+())(4!+)&,!3G)&34U!
!
"&.)2([!:/0()/30$&/3%!1&/(03);!<./4W!788eW!Annual Report on Exchange Arrangements and Exchange
Restrictions (AREAER).!
!
B. Correlation of Growth Rates with European Partners
c)&O0E!)30(*!&+!1&)&22&!3/4!5./$*$3W!&/!&/(!E3/4W!3/4!0E($)!Q(;!-.)&#(3/!#3)0/()*W!&/!0E(!
&0E()!E3/4W!3##(3)!*0)&/R%;!#&*$0$'(%;!2&))(%30(4!$/!0E(!%3*0!4(234(U!:/!&.)!(2&/&,(0)$2!3/3%;*$*W!
O(!.*(!)(3%!/&/3R)$2.%0.)3%!;(3)K&/K;(3)!R)&O0E!)30(*!&+!cD>!*()$(*!+&)!1&)&22& WMOR NA
tg !3/4!

11. ! 98!
5./$*$3 WTUN NA
tg Ug
!5E(*(!*()$(*!3)(!*(3*&/3%%;!34J.*0(4!3/4!3'3$%3G%(!&/!3!X.3)0()%;!G3*$*U!<&)!0E(!
-VW!3!2&./0);K*#(2$+$2!2&,#&*$0(!cD>!R)&O0E!)30(! S TEU
tg !$*!23%2.%30(4!3*!3!O($RE0(4!3'()3R(!
&+!R)&O0E!)30(*!&+!0E(!,3$/!-V!#3)0/()*!G3*(4!&/!0E(!O($RE0*!0E(*(!2&./0)$(*!03Q(!$/!1&)&22&`*!
3/4!5./$*$3`*!(P#&)0*!&+!R&&4*!)(*#(20$'(%;U!
5E(!2&./0);!O($RE0*!3)(!2&/*0).20(4!G;!0E(!:1<!+&)!
0E(!c%&G3%!-2&/&,$2!-/'$)&/,(/0!Sc--TU!5E(!3##(/4$P!2&/03$/*!0E(!+&),.%3!+&)! S TEU
tg !3/4!
03G%(*!O$0E!0E(!c--!O($RE0*!.*(4!+&)!1&)&22&!3/4!5./$*$3U!
53G%(!7U!f&%30$%$0;!3/4!B&))(%30$&/!B&(++$2$(/0*!&+!c)&O0E!b30(*W!7888l9i788el^!
!
! WMOR NA
tg ! S TEU
tg MOR ! WTUN NA
tg ! S TEU
tg TUN ! S Ttg Oil !
WMOR NA
tg ! 1.69 ! ! ! !
! ! ! ! ! !
S TEU
tg MOR ! 8U^g! 2.08 ! ! !
! S@U79T! ! ! ! !
! ! ! ! ! !
WTUN NA
tg ! ! ! 1.59 ! !
! ! ! ! ! !
! ! ! ! ! !
S TEU
tg TUN ! ! ! 8Ug@! 2.05 !
! ! ! SU8gT! ! !
S Ttg Oil ! 8U9g! ! K8U8h! ! 14.60
! S8UeAT! ! SK8U^@T! ! !
"&.)2([!:1<!*03++!(*0$,30(*U!
"03/43)4!4('$30$&/*!3)(!&/!0E(!4$3R&/3%!3/4!2&))(%30$&/*!&++K4$3R&/3%U!L(0O((/!G)32Q(0*!3)(!0E(!5K*030*!+&)!
0E(! /.%%!E;#&0E(*$*!0E30!3! *$/R%(!2&))(%30$&/!2&(++$2$(/0!$*! (X.3%!0&!F()&U! Oil!$*!0E(!*#&0!#(0)&%(.,!#)$2(!
S3'()3R(!&+!<30(EW!L)(/0!3/4!=5:T!$/!V"q!*23%(4!G;!V"!B>:U!
!
53G%(!7!*E&O*!3!*0)&/R!#&*$0$'(!2&))(%30$&/!G(0O((/!0E(!R)&O0E!)30(* S TEU
tg MOR 3/4 WMOR NA
tg !3/4
S TEU
tg TUN O$0E WTUN NA
tg Uh
!5E$*!2&))(%30$&/!$*!^g!#()2(/0!+&)!1&)&22&!3/4!g@!#()2(/0!+&)!5./$*$3U!
"030$*0$23%!0(*0*!)(J(20!0E(!E;#&0E(*$*!0E30!0E(*(!2&))(%30$&/*!3)(!(X.3%!0&!F()&U!5E(!03G%(!3%*&!
*E&O*!0E30!0E()(!$*!/&!*0)&/R!2&))(%30$&/!G(0O((/!R)&O0E!$/!)(3%!#(0)&%(.,!*#&0!#)$2(*W! S Ttg Oil W!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
g
!=(!(P2%.4(!3R)$2.%0.)3%!&.0#.0!+)&,!cD>!3*!0E$*!2&,#&/(/0!)(,3$/*!%3)R(%;!4(#(/4(/0!&/!2%$,30$2!+320&)*!$/!G&0E!
2&./0)$(*U!:/!OE30!+&%%&O*W!./%(**!&0E()O$*(!*#(2$+$(4W!O(!./4()*03/4!/&/3R)$2.%0.)3%!cD>!OE(/!)(+())$/R!0&!
1&)&22&!3/4!5./$*$3`*!cD>U!!
h
!=(!+&./4!*$,$%3)!/.,G()*!OE(/!23%2.%30$/R!0E(!2&))(%30$&/!&+!1&)&223/!3/4!5./$*$3/!R)&O0E!)30(*!O$0E!(.)&F&/(!
cD>!)(#&)0(4!G;!-.)&*030U!!

12. ! 99!
3/4!1&)&223/!&)!5./$*$3/!R)&O0E!)30(*U!5E$*!*.RR(*0*!0E30!0E(!2&))(%30$&/*!&+! WMOR NA
tg !3/4
WTUN NA
tg !O$0E!R)&O0E!$/!0E($)!-.)&#(3/!#3)0/()*!3)(!/&0!E$4$/R!0E(!(++(20!&+!3!R%&G3%!2;2%(UA
!
III. ESTIM A TING T H E SPIL L O V ERS
A. Identification Scheme
=(!#)&2((4!O$0E!3!fCbKG3*(4!$4(/0$+$230$&/!*2E(,(!$/!&)4()!0&!(*0$,30(!0E(!$,#320!&+!3/!
$//&'30$&/!$/!-V!R)&O0E!&/!1&)&22&!3/4!5./$*$3!/&/3R)$2.%0.)3%!cD>!R)&O0EU!1&)(!
*#(2$+$23%%;W!+&)!2&./0);!JW!0E(!'3)$3G%(*!$/2%.4(4!$/!0E(!G3*(%$/(!fCb!3)([!!
W
S TW kUEU j NA
t t tZ g j g    !
5E(!)(4.2(4K+&),!fCb!$*[!!
WTkSW
9
VuuEuZBcZ
p
j
tttjtjt  
 !
OE()(!2!$*!3!2&/*03/0!3/4! tZ !$*!0E(!,30)$P!O$0E!'3)$3G%(*U!5E(!)(4.2(4K+&),!)(*$4.3%*! tu 3)(!
,3##(4!$/0&!0E(!*0).20.)3%!*E&2Q*! t !G;!0E(!*0).20.)3%!,30)$P oA [!
8 Ut tA u  !
=(!.*(!0E(!$/'()*(!&+!0E(!BE&%(*Q$!+320&)!&+!0E(!'3)$3/2(K2&'3)$3/2(!,30)$P!V!0&!$4(/0$+;!
*0).20.)3%!*E&2Q*!0E30!3)(!&)0E&R&/3%!0&!(32E!&0E()W!   IE tt k W!OE()(!I!$*!0E(!$4(/0$0;!,30)$PU!
5E$*!2&))(*#&/4*!0&!0E(!3**.,#0$&/!0E30!&/!$,#320!*0).20.)3%!*E&2Q*!$/!5./$*$3!E3'(!3!F()&!(++(20!
&/!*E&2Q*!$/!-.)&#(3/!#3)0/()!2&./0)$(*U!:0!$*!$,#&)03/0!0&!/&0(!0E30!2E3/R$/R!0E(!&)4()$/R!&+!0E(!
'3)$3G%(*!$/!Z!4$4!/&0!2E3/R(!&.)!)(*.%0*U!
B. Responses to External Growth Shock
<&)!(32E!2&./0);!O(!.*(!0E(!%&/R(*0!3'3$%3G%(!X.3)0()%;!4303!+&)!0E(!fCb!(*0$,30$&/U!<&)!
1&)&22&W!0E(!*3,#%(!2&'()*!0E(!#()$&4!9ee8l9!0&!788el^W!OE()(3*!+&)!5./$*$3!0E(!4303*(0!$*!
+)&,!7888l9!0&!788el^U!e
!D(*#$0(!2&'()$/R!3!)(%30$'(%;!*E&)0!0$,(!*#3/W!0E(*(!4303*(0*!3%%&O!.*!
0&!23#0.)(!0E(!)(2(/0!#()$&4!&+!E$RE!R)&O0E!O$0E!$,#&)03/0!*0).20.)3%!2E3/R(*!+&%%&O(4!G;!0E(!
34'()*(!*E&2Q!&+!788Ai8eU!=(!$/2%.4(!0O&!%3R*!$/!0E(!(*0$,30(4!fCb*U!C22&)4$/R!0&!0E(!
"2EO3)F!$/+&),30$&/!2)$0()$3W!0E$*!$*!0E(!&#0$,3%!%3R!%(/R0E!+&)!G&0E!1&)&22&!3/4!5./$*$3U!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
A
!5K0(*0*!3%*&!+3$%!0&!)(J(20!0E(!E;#&0E(*$*!0E30!2&))(%30$&/*!&+!1&)&223/!&)!5./$*$3/!cD>!R)&O0E!)30(*!O$0E!V"!)(3%!
cD>!R)&O0E!3)(!*$R/$+$23/0%;!4$++()(/0!+)&,!F()&U!
e
!"$,.%30$&/*!)./!+&)!1&)&22&!&/!0E(!7888l9i788el^!0$,(!$/0()'3%!%(34!0&!'();!*$,$%3)!)(*.%0*!0&!0E(!&/(*!
#)(*(/0(4!$/!0E$*!#3#()U!

13. ! 97!
<$R.)(!!*E&O*!$,#.%*(!)(*#&/*(!+./20$&/!S:b<*T!&+!R)&O0E!$/!1&)&22&!3/4!5./$*$3!0&!3!&/(!
*03/43)4!4('$30$&/!*E&2Q!$/!0E(!R)&O0E!&+!cD>!$/!0E(!(2&/&,$2!#3)0/()*U!5E(!R)3#E!3%*&!$/2%.4(*!
*03/43)4!())&)!G3/4*!(/2&,#3**$/R!0E(!e!#()2(/0!2&/+$4(/2(!$/0()'3%U!5E(!$,#.%*(!)(*#&/*(!&+!
G&0E!1&)&22&!3/4!5./$*$3!cD>!R)&O0E!0&!-V!cD>!R)&O0E!$*!*$R/$+$23/0%;!4$++()(/0!+)&,!F()&!$/!
0E(!+$)*0!+&.)!X.3)0()*U!C!'3)$30$&/!&+!&/(!#()2(/03R(!#&$/0!$/!-V!cD>!R)&O0E!#)&4.2(*!3!*$,$%3)!
#(3Q!)(*#&/*(!$/!1&)&22&!S8Ue!$/!0E(!*(2&/4!X.3)0()T!2&,#3)(4!0&!5./$*$3!S8Ug7!$/!0E(!0E$)4!
X.3)0()T!G.0!R(/()30(*!3!,&)(!3G).#0!3/4!*E&)0!%$'(4!)(*#&/*(!+&)!1&)&22&W!OE$%(!0E(!)(*#&/*(!$*!
,&)(!#()*$*0(/0!$/!0E(!23*(!&+!5./$*$3U!!
C*!3!)&G.*0/(**!2E(2QW!O(!3%*&!)('()*(4!0E(!&)4()!&+!0E(!R)&O0E!)30(*!$/!0E(!fCbW!3/4!+&./4!
*$,$%3)!)(*.%0*U!C*!(P#(20(4W!$/!3%%!0E(!"fCb*W!R)&O0E!*E&2Q*!$/!1&)&22&!3/4!5./$*$3!R(/()30(!
/&/*$R/$+$23/0!)(*#&/*(*!&/!R)&O0E!$/!0E(!-V!#3)0/()!2&./0)$(*U98
!
<$R.)(!U!b(*#&/*(!&+!D&,(*0$2!c)&O0E!0&!3/!-P0()/3%!c)&O0E!"E&2Q!
"&.)2([!:1<!*03++!(*0$,30(*U!
5E(!'3)$3/2(!4(2&,#&*$0$&/*!)(#&)0(4!$/!53G%(!@!*E&O!E&O!,.2E!&+!0E(!+&)(23*0!())&)!'3)$3/2(!
&+!3!2&./0);`*!cD>!R)&O0E!23/!G(!(P#%3$/(4!G;!0E(!*0).20.)3%!*E&2Q*!0&!cD>!R)&O0E!$/!-V!
#3)0/()!2&./0)$(*U!5E(!*E3)(!(P#%3$/(4!G; S TEU
tg MOR 3/4! S TEU
tg TUN $/2)(3*(*!30!%&/R()!
E&)$F&/*U!C0!3!98KX.3)0()!+&)(23*0!E&)$F&/W!*E&2Q*!0&! S TEU
tg MOR (P#%3$/!99!#()2(/0!&+!
1&)&22&`*!cD>!R)&O0E!OE()(3*!*E&2Q*!0& S TEU
tg TUN !(P#%3$/!@A!#()2(/0!&+!5./$*$3`*!cD>!
R)&O0EU!!
! !
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
98
!<.)0E(),&)(W!+&)(23*0!())&)!'3)$3/2(!4(2&,#&*$0$&/*!*E&O!0E30!0E(!*E&2Q*!$/!1&)&22&!3/4!5./$*$3!4&!/&0!(P#%3$/!
0E(!*E&2Q*!$/!-V!#3)0/()!2&./0)$(*U!!
‐1
‐0.5
0
0.5
1
1.5
1Q 2Q 3Q 4Q 5Q 6Q 7Q 8Q 9Q 10Q
(a) Morocco
0.55
‐1
‐0.5
0
0.5
1
1.5
1Q 2Q 3Q 4Q 5Q 6Q 7Q 8Q 9Q 10Q
(b) Tunisia
0.59

14. ! 9@!
53G%(!@U!<&)(23*0!-))&)!f3)$3/2(!D(2&,#&*$0$&/*!!
-P#%3$/(4!G;! S TEU
tg  !S$/!rT!
Quarter Morocco Tunisia
1 0.49 3.78
2 6.01 17.20
3 8.12 28.94
4 9.91 34.55
5 10.51 36.71
6 10.71 37.28
7 10.74 37.31
8 10.74 37.36
9 10.74 37.58
10 10.75 37.90
!
!!!!"&.)2([!:1<!*03++!(*0$,30(*U!
C. Alternative Identification of Shocks
=(!3/3%;F(!0E(!)&G.*0/(**!&+!0E(!(3)%$()!)(*.%0*!G;!2&/*$4()$/R!3!%&/RK)./!$4(/0$+$230$&/!*2E(,(!
+&)!0E(!*0).20.)3%!*E&2Q*!$/!-V!#3)0/()!2&./0)$(*U!"#(2$+$23%%;W!)30E()!0E3/!$4(/0$+;$/R!0E(!
*0).20.)3%!*E&2Q!$/!-V!#3)0/()!2&./0)$(*!G;!$,#&*$/R!3!F()&!)(*#&/*(!&/!$,#320W!O(!$4(/0$+;!0E$*!
*E&2Q!G;!3**.,$/R!0E30!R)&O0E!$/!1&)&22&!&)!5./$*$3!E3*!/&!%&/RK)./!$,#320!&/!cD>!$/!#3)0/()!
2&./0)$(*U!5E$*!3**.,#0$&/!23/!G(!,&0$'30(4!G;!0E(!*$F(!&+!1&)&22&!&)!5./$*$3`*!(2&/&,;!
2&,#3)(4!0&!0E30!&+!#3)0/()!2&./0)$(*U!<&%%&O$/R!L%3/2E3)4!3/4!l.3E!S9eAeTW!0E(!'3)$3G%(*!
$/2%.4(4!$/!0E(!G3*(%$/(!fCb!3)(!&)4()(4!3*!G(+&)([!!
W
S TW kUEU j NA
t t tZ g j g    !
5E(!%&/RK)./!(++(20*!&+!0E(!*0).20.)3%!*E&2Q*!3)(!R$'(/!G;[!!
tZ    U!
5E(!$4(/0$+$230$&/!3**.,#0$&/!+&)!0E(!%&/RK)./!)(*0)$20$&/!$*!0E(/[!!
S9W[T s S9W9T 8t   !
<$R.)(!g!*E&O*!0E30!0E(!:b<*!0&!*0).20.)3%!*E&2Q*!$/!-V!#3)0/()!2&./0)$(*!$4(/0$+$(4!.*$/R!0E$*!
%&/RK)./!)(*0)$20$&/!*2E(,(!)(*(,G%(!0E(!*E&2Q*!$4(/0$+$(4!$/!0E(!*E&)0K)./!$4(/0$+$230$&/!*2E(,(U!
=(!3%*&!344(4!:b<*!0&!3!&/(!*03/43)4!4('$30$&/!*E&2Q!&+!0E(!)(4.2(4K+&),!)(*$4.3%W!*&!O$0E&.0!
,3Q$/R!3/;!$4(/0$+;$/R!)(*0)$20$&/!&/!0E(!2&))(%30$&/!,30)$P!&+!0E(!)(*$4.3%* tu U!5E(!+$R.)(!
*.RR(*0*!0E30!G&0E!0E(!*E&)0K)./!3/4!%&/RK)./!)(*0)$20$&/*!4&!/&0!$,#&*(!G$R!0)3/*+&),30$&/*U!!
! !

15. ! 9^!
<$R.)(!gU!"E&)0Kb./!'()*.*!Y&/RKb./!b(*0)$20$&/*!
"&.)2([!:1<!*03++!(*0$,30(*U!
IV. DE C O MPOSIN G T H E SPIL L O V ERS BY TRANSMISSION CH ANNE LS
5&!R(0!3!*(/*(!&+!0E(!)(%30$'(!$,#&)03/2(!&+!4$++()(/0!0)3/*,$**$&/!2E3//(%*!O(!+&%%&O!0E(!
3##)&32E!#)&#&*(4!$/!L3;&.,$!3/4!"O$*0&/!S788eTU!5E(!"fCb*!3)(!3.R,(/0(4!&/(!30!3!0$,(!
O$0E!4303!&/!0)34(W!0&.)$*,!3/4!)(,$003/2(*!3*!(P&R(/&.*!'3)$3G%(*U!5E(!#&0(/0$3%!2&/0)$G.0$&/! kc !
&+!3!#3)0$2.%3)!2E3//(%!k!$*!0E(/!23%2.%30(4!3*[!!
Uk kc r r  !
5E(!2&/0)$G.0$&/! kc !$*!0E(!4$++()(/2(!G(0O((/!0E(!)(*#&/*(*!&+!R)&O0E!$/!1&)&22&!&)!5./$*$3!0&!
R)&O0E!$/!#3)0/()!2&./0)$(*!SrT!,$/.*!0E(!)(*#&/*(!&+!R)&O0E!OE(/!0E(!*#$%%&'()!$*!$/2%.4(4!3*!3/!
(P&R(/&.*!'3)$3G%(!S kr TU!5E(!$4(3!$*!0E30!344$/R!0E(!(P&R(/&.*!'3)$3G%(!0&!0E(!fCb!%(3'(*!$/! kr !
0E(!#3)0!&+!0E(!)(*#&/*(!0E30!$*!/&0!3**&2$30(4!O$0E!0E(!0)3/*,$**$&/!2E3//(%!k!S<$R.)(!hTU!!
!
<$R.)(!hU!L3;&.,$!3/4!"O$*0&/!C##)&32E!
!
"&.)2([!:1<!*03++!(*0$,30(*U!
!
5E$*!3##)&32E!4&(*!/&0!(P2%.4(!0E(!(P$*0(/2(!&+!&0E()!)(%('3/0!0)3/*,$**$&/!2E3//(%*!3/4!4&(*!
/&0!322&./0!+&)!0E(!2&%%$/(3)$0;!G(0O((/!0E(!4$++()(/0!2E3//(%*U!5E$*!3%*&!$,#%$(*!0E30!0E(!*&.)2(*!
&+!*#$%%&'()*! kc !
3)(!/&0!/(2(**3)$%;!)(X.$)(4!0&!*.,!.#!0&!0E(!$,#.%*(!)(*#&/*(!rU!C*!*.2EW!O(!
‐1
‐0.5
0
0.5
1
1.5
1Q 2Q 3Q 4Q 5Q 6Q 7Q 8Q 9Q 10Q
(a) Morocco
Short‐run Long‐run
Reduced
‐1
‐0.5
0
0.5
1
1.5
1Q 2Q 3Q 4Q 5Q 6Q 7Q 8Q 9Q 10Q
(b) Tunisia
Short‐run Long‐run
Reduced

16. ! 9!
#)(+()!0&!0E$/Q!&+!0E$*!0(2E/$X.(!3*!3!R3.R(!#)&'$4$/R!3/!$/4$230$&/!&+!0E(!)(%30$'(!$,#&)03/2(!&+!
0E(!,3J&)!2E3//(%*!3/4!/&0!3*!3!#)(2$*(!G)(3QK4&O/!&+!0E(!$,#.%*(!)(*#&/*(U!99
!!!
<$R.)(!AU!B.,.%30$'(!b(*#&/*(*!0&!c)&O0E!://&'30$&/!$/!>3)0/()!B&,#&*$0(!
"&.)2([!:1<!*03++!(*0$,30(*U!
<$R.)(!A!*E&O*!0E(!2.,.%30$'(!$,#320!&+!0E(!4$++()(/0!2&/0)$G.0$&/*! kc !4(0(),$/(4!O$0E!0E$*!
,(0E&4!+&)!1&)&22&!3/4!5./$*$3W!OE()(!0E(!*0).20.)3%!*E&2Q*!3)(!$4(/0$+$(4!3*!$/!"(20$&/!:::UCU!
=(!3%*&!$/2%.4(!0E(!2.,.%30$'(!$,#.%*(!)(*#&/*(!+./20$&/!&+!0E(!"fCb*!(*0$,30(4!$/!"(20$&/!
:::ULU!5E(!3/3%;*$*!*.RR(*0*!0E30W!$/!0E(!23*(!&+!5./$*$3W!(P#&)0*W!3/4!0&!3!,.2E!%(**()!(P0(/0!
0&.)$*,W!3)(!0E(!,3J&)!0)3/*,$**$&/!2E3//(%*U!b(,$003/2(*!*((,!0&!#%3;!3!'();!%$,$0(4!)&%(!30!
0E(*(!+)(X.(/2$(*U!<&)!1&)&22&W!0E(!)(*.%0*!*E&O!0E30!G(*$4(*!(P#&)0*W!OE$2E!*0$%%!#%3;!3/!
$,#&)03/0!)&%(W!)(,$003/2(*!3/4!0&.)$*,!3)(!3%*&!,3J&)!0)3/*,$**$&/*!2E3//(%*!+&)!*#$%%&'()*U!
B)&**K2&))(%30$&/*!G(0O((/!0E(!0E)((!+%&O*!3)(!*$R/$+$23/0!$/!0E(!23*(!&+!1&)&22&U!
5E(*(!)(*.%0*!3)(!$/!%$/(!O$0E!0E(!320.3%!('&%.0$&/*!$/!(P#&)0*W!0&.)$*,!3/4!)(,$003/2(*!&G*()'(4!
4.)$/R!0E(!)(2(/0!*%&O4&O/!$/!-.)&#(!S<$R.)(!eTU!:/!1&)&22&!3%%!0E(!0E)((!'3)$3G%(*!*0)&/R%;!
)(*#&/4(4!0&!0E(!*E3)#!4)&#!$/!-V!cD>U97
!:/!5./$*$3W!&/!0E(!&0E()!E3/4W!(P#&)0*!O()(!0E(!,&*0!
3++(20(4U!5&.)$*,!)(2($#0*!$/!5./$*$3!O()(!%(**!3++(20(4W!OE$%(!)(,$003/2(*!*E&O(4!3!)(,3)Q3G%;!
*0)&/R!)(*$%$(/2(U!!
! !
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
99
!<&)!,&)(!4(03$%*!&/!0E$*!3##)&32EW!*((!L3;&.,$!3/4!"O$*0&/!S788eTU!!
97
!5&03%!(P#&)0!#()+&),3/2(!$/!1&)&22&!$*!3%*&!$/+%.(/2(4!G;!*E3)#!+%.20.30$&/*!$/!$/0()/30$&/3%!#)$2(*!3/4!'&%.,(*!
&+!#E&*#E30(!(P#&)0*U!5E(!*E3)(!&+!#E&*#E30(!$/!0&03%!(P#&)0*!O3*!A!#()2(/0!$/!788hW!9^!#()2(/0!$/!788AW!3/4!
h!#()2(/0!$/!788eU!l.3/0$0$(*!4(2)(3*(4!9g!#()2(/0!$/!788A!3/4!8!#()2(/0!$/!788eW!OE()(3*!#)$2(*!,&)(!0E3/!0)$#%(4!
$/!788A!3/4!+(%%!^9!#()2(/0!$/!788eU!!
0.18
0.40
0.68
1.02
1.37
1.69
0.10
0.37
0.75
1.21
0.00
1.00
2.00
0.00
1.00
2.00
3.00
4.00
5.00
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8
(a) Morocco
Remittances
Tourism
Exports
(IR) RHS
4.16
(1.52)
0.75
1.47
1.97
2.28
2.44 2.46 2.39
0.28
0.37
0.41 0.41
0.38
0.00
1.00
2.00
3.00
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8
(b) Tunisia
Remittances
Tourism
Exports
(IR)
2.88
(2.31)

17. ! 9g!
<$R.)(!eU!b(320$&/*!0&!0E(!b(2(/0!"%&O4&O/!$/!-.)&#(!
S@!,&/0E!,&'$/R!3'()3R(!;K&K;!R)&O0E!)30(*!&+!'3)$3G%(*!$/!%&23%!2.))(/2;W!$/!#()2(/0T!
"&.)2([!B&./0);`*!3.0E&)$0$(*]!3/4!:1<!*03++!(*0$,30(*U!
!
V. SE C T ORA L ANA L YSIS
:/!0E$*!*(20$&/!O(!0(*0!0E(!)&G.*0/(**!&+!0E(!#)('$&.*!)(*.%0*!G;!(P3,$/$/R!0E(!)(*#&/*(!&+!R)&O0E!
$/!4$++()(/0!*(20&)*!0&!R)&O0E!*E&2Q*!$/!-V!#3)0/()!2&./0)$(*U!5&!0E$*!3$,W!O(!)(K)./!0E(!"fCb!
3/4!)(#%32(!0E(!/&/3R)$2.%0.)3%!cD>!R)&O0E!)30(*!+&)!5./$*$3!3/4!1&)&22&!O$0E!0E(!cD>!R)&O0E!
)30(*! Wj SECTOR
tg !$/!#3)0$2.%3)!*(20&)*U!C*!$/!"(20$&/!:::!LW!0E(!$,#.%*(!)(*#&/*(!,(3*.)(*!0E(!
)(320$&/!&+!0E(*(!*(20&)*`!'3%.(!344(4!R)&O0E!)30(!0&!0E(!2&./0);K*#(2$+$2!-V!cD>!2&,#&*$0(U!
<&)!2&./0);!JW!0E(!'3)$3G%(*!$/2%.4(4!$/!0E(!fCb!3)(!0E(/[!!
!
W
W S T kUj SECTOR EU
t t tZ g g j    !
!
:/!%$/(!O$0E!0E(!)(*.%0*!#)(*(/0(4!$/!"(20$&/!:fW!<$R.)(!98!*E&O*!0E30!$/!1&)&22&!*()'$2(K)(%30(4!
*(20&)*W!OE$2E!3)(!,&)(!*$R/$+$23/0%;!$/+%.(/2(4!G;!0&.)$*,!3/4!0)3/*+()*W!3##(3)!0&!G(!,&)(!
*(/*$0$'(!0&!0E(!-.)&#(3/!2;2%(U!"(20&)*!*.2E!3*!,3/.+320.)$/RW!2&/*0).20$&/W!,$/$/R!3/4!(/()R;!
4&!/&0!*((,!0&!G(!*$R/$+$23/0%;!$/+%.(/2(4U!L;!2&/0)3*0W!$/!5./$*$3!(P#&)0K&)$(/0(4!*(20&)*W!*.2E!
3*!,3/.+320.)$/R!3/4!(/()R;W!3)(!0E(!,&*0!)(*#&/*$'(U!CR)$2.%0.)(W!,$/$/R!3/4!&0E()!*()'$2(*!
*E&O!O(3Q!)(320$&/*!0&!0E(!'3)$30$&/*!$/!-V!cD>U!
!
<$R.)(!98U!B.,.%30$'(!b(*#&/*(!&+!"(20&)!c)&O0E!0&!3/!-P0()/3%!c)&O0E!"E&2Q!
"&.)2([!:1<!*03++!(*0$,30(*U!
‐50
‐30
‐10
10
30
50
Jun‐08 Oct‐08 Feb‐09 Jun‐09 Oct‐09 Feb‐10
Exports
Tourism
receipts
Remittances
(a) Morocco
‐50
‐30
‐10
10
30
50
Jun‐08 Oct‐08 Feb‐09 Jun‐09 Oct‐09 Feb‐10
Exports
Tourism
receipts
Remittances
(b) Tunisia
0
1
2
3
4
5
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10
(a) Morocco
Commerce
Other
Services
Transports
&Telecom
Non‐responsive
sectors:
‐ Manufacturing
‐ Agriculture
‐ Mining
‐ Construction
‐ Energy
0
4
8
12
16
Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10
(b) Tunisia
Manufacturing
Energy
Transports
&Telecom
Construction
Non‐responsive
sectors:
‐ Agriculture
‐ Mining
‐ Other services

18. ! 9h!
VI. PO LIC Y IMPLIC A TIONS
5E(!(2&/&,(0)$2!3/3%;*$*!4(,&/*0)30(*!0E30W!+&)!G&0E!5./$*$3!3/4!1&)&22&`*!(2&/&,$(*W!0E(!
-.)&#(3/!V/$&/!#%3;*!3!Q(;!)&%(U!N.)!3/3%;*$*!2&/+$),*!0E(!)&G.*0/(**!&+!0E$*!2&//(20$&/!3/4!
(P3,$/(*!)(%30$'(!$,#&)03/2(!&+!$0*!4$++()(/0!0)3/*,$**$&/!2E3//(%*U!=E$%(!0E(*(!2%&*(!0$(*!O$0E!
0E(!-.)&#(3/!V/$&/!E3'(!G((/!3!2(/0)3%!+320&)!2&/0)$G.0$/R!0&!0E(!#)&2(**!&+!&#(/$/R!.#!0E(!0O&!
(2&/&,$(*!3/4!$,#)&'$/R!0E($)!2&,#(0$0$'(/(**W!0E(;!,$RE0!3%*&!)(#)(*(/0!3!2E3%%(/R(!+&)!0E(!
+.0.)(U!!
b(3%!&.0#.0!4)&##(4!G;!,&)(!0E3/!^!#()2(/0!$/!0E(!-.)&!C)(3!$/!788eU!1&)(&'()W!2.))(/0!
+&)(23*0*!3)(!0E30!0E(!)(G&./4!$/!0E(!-V!3)(3!O$%%!G(!,&4(*0!3/4!*%&OU!c)&O0E!$/!G&0E!4&,(*0$2!
4(,3/4!3/4!)(3%!cD>!O$%%!*03;!G(%&O!0E($)!#)(K2)$*$*!%('(%*!$/!0E(!;(3)*!0&!2&,(!S<$R.)(!99TU!
b(2(/0!2&/2()/*!3G&.0!*&'()($R/!4(G0!3/4!0E(!*.*03$/3G$%$0;!&+!#.G%$2!+$/3/2(*!$/!"&.0E()/!
-.)&#(3/!2&./0)$(*!344!+.)0E()!4&O/*$4(!)$*Q*!0&!0E$*!&.0%&&QU!
<$R.)(!99U!-.)&!C)(3jb(3%!cD>!3/4!b(3%!:,#&)0*!c)&O0E!
S:/!#()2(/0T!
! !
"&.)2([!:1<W!=&)%4!-2&/&,$2!N.0%&&Q!SC#)$%!7898T!3/4!=&)%4!-2&/&,$2!N.0%&&Q!V#430(!SH.%;!7898TU!
Z&0!&/%;!O$%%!)(3%!cD>!R)&O0E!$/!-.)&#(!G(!%&O()W!G.0!0E(!(/R$/(*!&+!R)&O0E!$/!-.)&#(!3)(!
(P#(20(4!0&!2E3/R(W!O$0E!%(**!2&/0)$G.0$&/!2&,$/R!+)&,!0E(!4&,(*0$2!4(,3/4U!C*!3!)(*.%0W!
R)&O0E!$/!-.)&#(3/!$,#&)0*jOE$2E!)(#)(*(/0*!0E(!,3$/!*&.)2(!&+!(P0()/3%!4(,3/4!+&)!1&)&22&!
3/4!5./$*$3j$*!#)&J(20(4!0&!G(!%(**!0E3/!E3%+!2&,#3)(4!0&!0E(!#)(K2)$*$*!#()$&4!$/!7898!3/4!7899!
S<$R.)(!99TU!!
:0!$*!/&0(O&)0E;!0E30!+&%%&O$/R!0E(!3**&2$30$&/!3R)((,(/0*!0E(!,3)Q(0!*E3)(*!&+!1&)&22&!3/4!
5./$*$3!$/!-V!,()2E3/4$*(!$,#&)0*!E3'(!/&0!$/2)(3*(4!*$/2(!9eeeU!53G%(!^!*E&O*!0E30!0E(*(!
,3)Q(0!*E3)(*!E3'(!)(,3$/(4!+3$)%;!*03G%(!&)!*%$RE0%;!4(2)(3*(4!&'()!0E(!#3*0!4(234(U!"('()3%!
+320&)*!23/!(P#%3$/!0E$*!('&%.0$&/W!*.2E!3*!0E(!$/2)(3*(4!%$G()3%$F30$&/!&+!O&)%4!0)34(!./4()!0E(!
=5N!3R)((,(/0*!3/4!0E(!+$()2(!2&,#(0$0$&/!+)&,!+3*0KR)&O$/R!(P#&)0()*!*.2E!3*!BE$/3!3/4!
-3*0()/!-.)&#(U!CR3$/*0!0E$*!G32Q4)&#W!,3$/03$/$/R!,3)Q(0!*E3)(!$*!,&)(!0E3/!E&/&)3G%(U!!
!
‐4.1
1.0 1.8 1.7
‐12
‐10
‐8
‐6
‐4
‐2
0
2
4
2007 2008 2009 2010 2011 2012 2013 2014 2015
Real GDP
(growth rates, in percent)Average
2000‐07:
2.1
Forecast
‐12.2
2.2 2.4
4.4
‐14
‐12
‐10
‐8
‐6
‐4
‐2
0
2
4
6
2007 2008 2009 2010 2011 2012 2013 2014 2015
Real Imports of goods
(growth rates, in percent)
Average
2000‐07:
5.8
Forecast

19. ! 9A!
53G%(!^[!1&)&22&!3/4!5./$*$3!"E3)(*!$/!-V!:,#&)0*!!
S:/!#()2(/0T!
EU (27 countries) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Morocco 0.8 0.6 0.7 0.7 0.7 0.6 0.8 0.5 0.6 0.5
Tunisia 0.7 0.6 0.6 0.7 0.7 0.7 0.6 0.6 0.6 0.6
"&.)2(![!-.)&*030U!D303!(P2%.4(*!$/0)3K-V!0)34(!+%&O*U!
1&)&22&!3/4!5./$*$3!E3'(!O(30E()(4!0E(!)(2(/0!*%&O4&O/!$/!-.)&#(!O(%%W!4.(!0&!)(%30$'(%;!
$/*.%30(4!+$/3/2$3%!*;*0(,*W!3/!(P2(#0$&/3%!3R)$2.%0.)3%!#)&4.20$&/!3/4!*0)&/R!4&,(*0$2!4(,3/4!
$/!788eU!:/!+320W!R)&O0E!322&./0$/R!(P()2$*(*!*.RR(*0*!0E30!4&,(*0$2!4(,3/4!E3*!G(2&,(!3!,&)(!
4;/3,$2!*&.)2(!&+!R)&O0E!$/!G&0E!2&./0)$(*!+)&,!788A!&/O3)4*U!p&O('()W!$/2)(3*$/R!
2&,#(0$0$'(/(**!3/4!3!+.)0E()!4$'()*$+$230$&/!&+!0)34(!+%&O*!)(#)(*(/0!Q(;!2E3%%(/R(*!0&!*.*03$/!
R)&O0E!$/!0E(!+.0.)(U!!
<$R.)(!97!*E&O*!0E(!*E3)(*!&+!0E(!-V!3/4!13RE)(G!$/!(P#&)0*W!$,#&)0*!3/4!0E(!4(*0$/30$&/K
*#(2$+$2!2&'()!)30$&!S(P#&)0*!0&!&'()!$,#&)0*!+)&,!3!)(R$&/TU!5E(!+$R.)(!*E&O*!0E30!0)34(!O$0E!
&0E()!13RE)(G!2&./0)$(*!$*!,3)R$/3%!+&)!G&0E!1&)&22&!3/4!5./$*$3W!3/4!)(#)(*(/0*!3/!
./(P#%&$0(4!#&0(/0$3%W!(*#(2$3%%;!$/!0E(!2&/0(P0!&+!0E(!,&)(!*.G4.(4!R)&O0E!#)&J(20$&/*!+&)!0E(!
-.)&#(3/!,3)Q(0U!
<$R.)(!97U!-V!3/4!V1C!"E3)(*!$/!:,#&)0*W!-P#&)0*!3/4!B&'()!b30$&W!788A!
S:/!#()2(/0T!
! !
V1C!u!V/$&/!4.!13RE)(G!C)3G(!SC%R()$3W!Y$G;3W!13.)$03/$3W!1&)&22&W!5./$*$3TU!
"&.)2([!B&./0);`*!3.0E&)$0$(*!3/4!:1<!*03++!(*0$,30(*U!
VII. CONC LUSI ON
=(!E3'(!*E&O/!0E30!+&)!G&0E!1&)&22&!3/4!5./$*$3!/&/3R)$2.%0.)3%!cD>!R)&O0E!)30(*!3)(!
*$R/$+$23/0%;!$/+%.(/2(4!G;!0E(!'3)$30$&/*!$/!cD>!&+!0E($)!,3$/!-.)&#(3/!#3)0/()*U!p&O('()W!0E(!
0)3/*,$**$&/!2E3//(%*!3##(3)!0&!G(!4$++()(/0!G(0O((/!0E(!0O&!2&./0)$(*U!:/!0E(!23*(!&+!5./$*$3W!
R)&O0E!*E&2Q*!3)(!,3$/%;!0)3/*,$00(4!0E)&.RE!(P#&)0*!3/4W!0&!3!,.2E!%(**()!(P0(/0W!0&.)$*,U!
-P#&)0*W!0&.)$*,!)(2($#0*!3/4!)(,$003/2(*!#%3;!(X.3%%;!$,#&)03/0!)&%(*!$/!1&)&22&U!5E(*(!)(*.%0*!
3)(!2&/+$),(4!G;!0E(!('&%.0$&/!&+!(P#&)0W!0&.)$*,W!3/4!)(,$003/2(*!$/!0E(!O3Q(!&+!0E(!)(2(/0!
0
20
40
60
80
100
Exports Imports Cover
(a) Morocco
EU UMA
0
20
40
60
80
100
Exports Imports Cover
(b) Tunisia
EU UMA

20. ! 9e!
*%&O4&O/!$/!-.)&#(U!C!*$,$%3)!(P()2$*(!30!0E(!*(20&)3%!%('(%!$/4$230(*!0E30!0E(!*(20&)*!)(%30(4!0&!
*()'$2(*!3)(!0E(!,&*0!)(*#&/*$'(!0&!-V`*!cD>!$/!1&)&22&W!OE$%(!$/!5./$*$3!0E(!,&*0!)(*#&/*$'(!
*(20&)*!3)(!,&)(!(P#&)0K&)$(/0(4U!!
=E$%(!&.)!+$/4$/R*!*E&O!3!)(,3)Q3G%(!2&E()(/2(W!0E()(!3)(!3!/.,G()!&+!%$,$030$&/*!0&!Q((#!$/!
,$/4!OE(/!$/0()#)(0$/R!0E(*(!)(*.%0*U!<$)*0W!$0!*E&.%4!G(!(,#E3*$F(4!0E30!3!fCb!3/3%;*$*!$*!/&0!3!
R)&O0E!322&./0$/R!(P()2$*(U!:0!*E&O*!0E(!*(/*$0$'$0;!&+!0E(!4(#(/4(/0!'3)$3G%(!0&!(P0()/3%!*E&2Q*!
)30E()!0E3/!0E(!$/+%.(/2(!&+!4$++()(/0!2&,#&/(/0*!&/!R)&O0EU!1&)(&'()W!0E(!)(*.%0*!&+!0E(!G)(3QK
4&O/!G;!0)3/*,$**$&/!2E3//(%!3)(!&/%;!0(/030$'(U!N0E()!#&0(/0$3%%;!$,#&)03/0!2E3//(%*W!*.2E!3*!
<D:W!$,#&)0*!3/4!+$/3/2$3%!*(20&)!%$/Q3R(*W!OE$2E!E3'(!*0).20.)3%!$,#320*!&/!0E(!(2&/&,;!$/!0E(!
%&/R!)./W!2()03$/%;!O3))3/0!+.)0E()!*0.4;U!
N.)!3/3%;*$*!2&/+$),*!0E(!$,#&)03/0!)&%(!#%3;(4!G;!0E(!-.)&#(3/!V/$&/!+&)!0E(!1&)&223/!3/4!
5./$*$3/!(2&/&,$(*U!=(!/&0(W!E&O('()W!0E30!0E$*!2%&*(!0$(!,$RE0!3%*&!)(#)(*(/0!3!2E3%%(/R(!+&)!
0E(!+.0.)(U!<&)!0E(!0O&!2&./0)$(*W!(/E3/2$/R!2&,#(0$0$'(/(**!3/4!4$'()*$+;$/R!0)34(!+%&O*!$*!
(**(/0$3%!+&)!*.*03$/$/R!+.0.)(!R)&O0EU!

21. ! 78!
APPENDIX. Trade Weights from the Global Economic Environment (G E E) !
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Morocco
France 36.36
Spain 33.42
United Kingdom 8.22
Italy 7.87
Belgium 5.33
Germany 5.20
Netherlands 3.60
Total 100
Tunisia
France 42.2
Italy 29.1
Germany 10.9
Spain 7.6
Belgium 3.7
United Kingdom 3.5
Netherlands 2.9
Total 100

22. ! 79!
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