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Interactive Impacts of Remittance Inflows on Economic Growth in Algeria: Is the N-shaped Hypothesis Valid?

Author

Listed:
  • Hicham Ayad
  • Amina Bendahmane
  • Mohamed Driouche Dahmani

Abstract

This investigation explores the influence of remittances on economic growth in Algeria during the period 1970-2022 using the Fourier autoregressive distributed lags (FARDL) model. This study provides new insights by suggesting an N-shaped association between remittances and economic growth. The findings reveal a nonlinear relationship between remittances and growth in Algeria. Initially, the impact of remittances on income is positive, then becomes negative when they exceed a threshold of 1.2% of GDP, and later becomes positive again when remittances surpass a second threshold estimated at 1.894% of GDP. These results highlight the importance of increasing remittance inflows to promote development in Algeria and urge decision-makers to create conditions that encourage the inflow of these funds through official channels

Suggested Citation

  • Hicham Ayad & Amina Bendahmane & Mohamed Driouche Dahmani, 2025. "Interactive Impacts of Remittance Inflows on Economic Growth in Algeria: Is the N-shaped Hypothesis Valid?," Politická ekonomie, Prague University of Economics and Business, vol. 2025(4), pages 584-614.
    • Handle: RePEc:prg:jnlpol:v:2025:y:2025:i:4:id:1464:p:584-614
    DOI: 10.18267/j.polek.1464
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    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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