The impact of oil price fluctuation on public expenditures in Algeria : econometric study

Abstract EN

This research aims to study the impact of oil prices fluctuation on public expenditures as a phenomenon in Algeria within the period 1986 to 2020.

to reach the objectives of the research work, annual data and the angel-granger approach for testing cointegration relationship were employed.

the study concluded that there is a long-run and a short-run correlation between oil prices and public expenditures.

in fact, the higher the price of oil is, the higher the public expenditures and the same in the case of oil price collapse ; this applies with the economic rent.

in addition, there is a positive relationship in the short-run and therefore the reduction of oil prices has a negative effect on the national economy.

this is what has been recently observed in the government's austerity policies and the rationalization of expenditures.