Sovereign debt and economic growth : explaining this relation in the case of Algeria’s economy during 1970-2015 by using OLS model

الملخص EN

-With the sovereign debt crisis that hit the euro-zone area this last decade, many economists and governors interested to this debatable issue, and pushed many researchers to lunch studies to analyze and clarify the recess of this destructive issue impact on the economy growth.

Recently, many Algerian government officials’ voices are going through the roof to borrow from abroad to face the current severe situation that is the drying of government financial resources due to the sharp decrease of oil prices in the international market that is being in glut.

For that reason, we try to show to them in this piece of investigation, the impact of this kind of debt (sovereign debt) on Algeria’s economic growth, for the purpose of measuring the burden of this debt and clarifying its hurdle to the growth of Algeria’s economy.

OLS regression model has been used to meet the aim of our study along with descriptive statistics, unit root test and Granger causality test over the time series data of the period 1970-2015.

The results show that all the dependent variables adopted in our study are statistically insignificant, with a very low positive impact of sovereign debt stock on Algeria’s economic growth that is accompanied by a heavy negative impact of its service (burden).

Key words: Sovereign debt, economic growth, OLS regression, Algeria’s economy, external debt.