Inflationary Effects of Budget Deficits in Algeria: An Econometric Approach.

This paper aims to provide empirical evidences about the extent to which budget deficits contribute to influencing price stability within the Algerian economy, using unconstrained VAR models, and based on annual data base covering the period (1990-2019). The results of Granger causality tests reve...

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Autor principal: نذير ياسين
Formato: article
Lenguaje:AR
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Publicado: Tamanrasset University Center 2021
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Acceso en línea:https://doaj.org/article/9679cff82a7043219dbd7a7aeb2e6f85
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spelling oai:doaj.org-article:9679cff82a7043219dbd7a7aeb2e6f852021-11-20T22:17:21ZInflationary Effects of Budget Deficits in Algeria: An Econometric Approach.10.36540/1914-010-003-0402335-10392437-0754https://doaj.org/article/9679cff82a7043219dbd7a7aeb2e6f852021-11-01T00:00:00Zhttps://alijtihed.univ-tam.dz/wp-content/uploads/2021/11/alijtihed-mag-031-art-040.pdfhttps://doaj.org/toc/2335-1039https://doaj.org/toc/2437-0754 This paper aims to provide empirical evidences about the extent to which budget deficits contribute to influencing price stability within the Algerian economy, using unconstrained VAR models, and based on annual data base covering the period (1990-2019). The results of Granger causality tests revealed the absence of causal relationships between budget deficit and money supply in either direction, which means that budget deficit doesn't affect prices through the monetary channel, which doesn't support the fiscal dominance hypothesis (SW-H). Same results indicated that there're two-way causal relationships between budget deficit and price levels, which indicates a direct impact of budget deficit on prices, in line with the theory of financial origin of inflation (FTPL). These results were confirmed by the results of impulse response functions and variance decomposition, which showed that an important part of inflationary pressures in the Algerian economy is directly fueled by imbalances in the government budget.نذير ياسينTamanrasset University Centerarticlebudget deficitinflationvar modelsalgeria.LawKEconomic history and conditionsHC10-1085ARENFRمجلة الاجتهاد للدراسات القانونية والاقتصادية, Vol 10, Iss 3, Pp 966-1003 (2021)
institution DOAJ
collection DOAJ
language AR
EN
FR
topic budget deficit
inflation
var models
algeria.
Law
K
Economic history and conditions
HC10-1085
spellingShingle budget deficit
inflation
var models
algeria.
Law
K
Economic history and conditions
HC10-1085
نذير ياسين
Inflationary Effects of Budget Deficits in Algeria: An Econometric Approach.
description This paper aims to provide empirical evidences about the extent to which budget deficits contribute to influencing price stability within the Algerian economy, using unconstrained VAR models, and based on annual data base covering the period (1990-2019). The results of Granger causality tests revealed the absence of causal relationships between budget deficit and money supply in either direction, which means that budget deficit doesn't affect prices through the monetary channel, which doesn't support the fiscal dominance hypothesis (SW-H). Same results indicated that there're two-way causal relationships between budget deficit and price levels, which indicates a direct impact of budget deficit on prices, in line with the theory of financial origin of inflation (FTPL). These results were confirmed by the results of impulse response functions and variance decomposition, which showed that an important part of inflationary pressures in the Algerian economy is directly fueled by imbalances in the government budget.
format article
author نذير ياسين
author_facet نذير ياسين
author_sort نذير ياسين
title Inflationary Effects of Budget Deficits in Algeria: An Econometric Approach.
title_short Inflationary Effects of Budget Deficits in Algeria: An Econometric Approach.
title_full Inflationary Effects of Budget Deficits in Algeria: An Econometric Approach.
title_fullStr Inflationary Effects of Budget Deficits in Algeria: An Econometric Approach.
title_full_unstemmed Inflationary Effects of Budget Deficits in Algeria: An Econometric Approach.
title_sort inflationary effects of budget deficits in algeria: an econometric approach.
publisher Tamanrasset University Center
publishDate 2021
url https://doaj.org/article/9679cff82a7043219dbd7a7aeb2e6f85
work_keys_str_mv AT ndẖyryạsyn inflationaryeffectsofbudgetdeficitsinalgeriaaneconometricapproach
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