An empirical characterization of the dynamic effects of fiscal policy shocks and the cyclical behavior of fiscal policy in Algeria between 1965-2009 : a structural VAR analysis

Other Title(s)

قياس الآثار الديناميكية لصدمات السياسة المالية و سلوكها الدوري في الجزائر بين 1965-2009 : التحليل بالنموذج الهيكلي للانحدار الذاتي المتجه

Dissertant

Khiar, Muhammad Lamine Ahmad Muhammad

Thesis advisor

Abd al-Raziq, Bashir Ahmad Faraj

University

Mutah University

Faculty

Faculty of Business

Department

Department of Economics, Business and Finance

University Country

Jordan

Degree

Master

Degree Date

2011

English Abstract

A characterization of the dynamic effects of shocks in government expenditure and revenue on the Algerian economy over the period from 1965 :1 to 2009 :1 was accomplished through this research.

To this end, a Structural Vector Autoregressive (SVAR) analysis was adopted, and the identification strategy of the empirical model was achieved by imposing long-run restrictions which were based on institutional interactions between some policy and non-policy instruments in order to identify and hence infer the effects of fiscal policy shocks on output, inflation, interest rate, private consumption and investment. Proceeding, this research has put forward a thorough characterization of the cyclical behavior of fiscal policy in Algeria.

To do so, an optimal model, considering an establishment of the discretionary public expenditure’s stance during the period 1965 to 2009, has been developed.

The Ordinary Least Squares (OLS) method was utilized in estimating the cyclicality of the fiscal policy instruments. Taking the two main empirical findings together, there is evidence for a major policy failure in the circumstance where the practical consequences were not entirely satisfactory and worse imply that the fiscal policy had played a minimal role in the consolidation of economic growth.

So, the use of fiscal policy as a stabilization device over business cycles had de facto an unproductive process in terms of outcomes and had also endured the macroeconomic volatility in Algeria.

Main Subjects

Economy and Commerce

Topics

• Economic policy
• Financial policy
• Algeria

No. of Pages

144

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-302593