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The Impact Of Exchange Rate On Economic Growth In Algeria

Author

Listed:
  • Mohammed Touitou

    (Faculty of Economics and Business, University of Algiers 3, Algiers)

  • Yacine Laib

    (Faculty of Economics and Business, University of Algiers 3, Algiers)

  • Ahmed Boudeghdegh

    (Faculty of Economics and Business, University of Jijel, Jijel)

Abstract

The transmission of changes in the exchange rate to macroeconomic performance has led to debates about their impact, particularly on growth economic. Many economists consider the exchange rate as a transmission channel of economic policy for open economies. This article focuses to determining empirically the impact of the exchange rate on economic growth. For this, we will adopt an approach in terms of the vector autoregressive model (VAR) with four variables namely, the real effective exchange rate, economic growth, financial development with credit indicators and finally the money supply. The empirical results allow us to confirm our theoretical expectations that decline in the real effective exchange rate of the dinar increases the growth economy through public spending for consumption and is stimulated by oil taxation.

Suggested Citation

  • Mohammed Touitou & Yacine Laib & Ahmed Boudeghdegh, 2019. "The Impact Of Exchange Rate On Economic Growth In Algeria," CBU International Conference Proceedings, ISE Research Institute, vol. 7(0), pages 323-330, September.
    • Handle: RePEc:aad:iseicj:v:7:y:2019:i:0:p:323-330
    DOI: 10.12955/cbup.v7.1381
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    More about this item

    Keywords

    Exchange rate; Economic growth; VAR; Financial development; Money supply.;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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