Abstract

Understanding which sectors generate the largest economy-wide and inclusive gains from productivity improvements is central to evidence-based industrial policy in emerging economies. This paper develops a sector-by-sector propagation framework for Morocco using a recursive dynamic computable general equilibrium (CGE) model calibrated to the country’s 2022 Social Accounting Matrix (SAM), with 27 production sectors linked through input–output relationships, factor markets, and trade mechanisms (Armington/CET). We conduct a controlled set of counterfactual experiments by applying a uniform 5% Hicks-neutral total factor productivity (TFP) increase separately to each sector, enabling consistent comparisons of how identical exogenous impulses translate into heterogeneous endogenous outcomes across industries. For each simulation, we report deviations from a business-as-usual path in output, value added, employment, wages, prices (CPI), trade flows, and intermediate demand, and we identify the key transmission channels behind intersectoral spillovers.

Results reveal strong asymmetries in “multiplier quality.” Sectors with dense domestic linkages and high local content—such as agriculture, agri-food processing, construction, and transport/logistics—tend to generate broader real-income effects through price reductions and higher domestic absorption, alongside stronger economy-wide spillovers. In contrast, capital-intensive export-oriented activities may exhibit large own-sector gains but weaker domestic diffusion when import leakages are substantial and supplier bases are thin. The proposed metrics provide an operational, statistics-informed way to rank sectors by efficiency, inclusion, and network spillovers, offering a transparent tool for prioritizing productivity-enhancing reforms and for linking national accounts/SAM-based evidence to industrial policy design.