DGE model for assessing macro-fiscal vulnerabilities in Algeria

Emmanuel Pinto Moreira and Baris Alpaslan

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: In this paper, we present a Dynamic General Equilibrium (DGE) model to address the macro-fiscal vulnerabilities and the effects of fiscal policy on growth and employment in Algeria. We first discuss a baseline scenario throughout the projection period, 2021-2040 and then conduct several experiments; an increase in the efficiency of public spending on infrastructure investment, a gradual reduction in the share of noninterest government spending in GDP, the same gradual reduction in spending with a permanent increase in the share of investment in infrastructure in total noninterest government expenditure, and a composite fiscal reform program, respectively. The results show that with a well-designed fiscal program, there may be no trade-off between fiscal consolidation and economic growth.

Keywords: DGE model; macro-fiscal vulnerabilities; fiscal policy; Algeria (search for similar items in EconPapers)
JEL-codes: C68 E62 O23 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2021-03
New Economics Papers: this item is included in nep-ara, nep-dge and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2021-30

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