The non-linear relationship between inflation, real effective exchange rate and economic growth in Algeria : an empirical study using threshold autoregressive model (TAR)‎ over the period 1980-2020

الملخص EN

The purpose of this paper is to identify the relationship between inflation, effective exchange rate, and economic growth in Algeria from 1980 to 2020 using the threshold autoregressive model (TAR), which is based on estimating acceptable minimum inflation (threshold) to achieve the desired economic growth.

if this threshold is exceeded, a negative effect on economic growth will occur.

according to the study results, Algeria's estimated inflation rate is 5.91%.

when inflation is less than the estimated threshold, neither inflation nor the real effective exchange rate has a statistically significant impact on growth.

however, when this threshold is exceeded, inflation has a negative statistically significant impact on growth ; because the effective exchange rate is still statistically insignificant, Algeria's development strategy does not focus on exchange policy.