The relationship between public expenditures and the GDP-growth in Algeria : an empirical study using the ARDL model

Abstract EN

This study aims to analyze and measure the relationship between public expenditures and the GDP growth in Algeria during the period 1990-2019 in the short and long terms, using the autoregressive distributed lag (ARDL) co-integration technique in which the Gross Domestic Product (GDP) is a dependent variable, while public expenditures, oil prices and foreign direct investment were also included as explanatory variables.

The main findings indicate that there is a long-run equilibrium relationship between public expenditures and gross domestic product, as Algeria seeks to raise the rate of GDP growth of and achieve economic development by increasing the volume of public expenditures based on an expansionary financial policy that is backed by oil revenues.