The dynamics of fiscal policy in Algeria: sustainability and structural change

Abderrahim Chibi (), Sidi Mohamed Chekouri () and Mohamed Benbouziane ()
Additional contact information
Abderrahim Chibi: University Centre of Maghnia
Sidi Mohamed Chekouri: University Centre of Maghnia

Journal of Economic Structures, 2019, vol. 8, issue 1, 1-27

Abstract: Abstract This study focuses on the empirical tests for the sustainability and solvency of fiscal policies in Algeria using a nonlinear model approach, based on quarterly data from 1963Q1 to 2017Q1 on the Algerian budget balance-GDP. Empirical evidence indicates that the adjustment behavior of the budget balance has nonlinear characteristics in the form of a Logistic model depending on the oil price. On the other hand, unit-root tests (linear, nonlinear, and with structural break) accept the null hypothesis of the unit roots. This means that the time series of budget balance is not stationary (not mean reverting characteristic), and therefore cannot sustain the budget deficit in Algeria over the long term. This suggests that Algerian government needs to pay more attention to the fiscal policy and efficiently control the budget deficit to avoid the debt crisis.

Keywords: Fiscal policy; Sustainability; Structural breaks; Nonlinear model; Stationarity (search for similar items in EconPapers)
JEL-codes: C22 E62 H62 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1186/s40008-019-0161-3 Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jecstr:v:8:y:2019:i:1:d:10.1186_s40008-019-0161-3

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40008

DOI: 10.1186/s40008-019-0161-3

Access Statistics for this article

Journal of Economic Structures is currently edited by Shigemi Kagawa and Kazuhiko Nishimura

More articles in Journal of Economic Structures from Springer, Pan-Pacific Association of Input-Output Studies (PAPAIOS) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().