1. bookVolumen 21 (2021): Edición 2 (December 2021)
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1898-0198
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06 May 2008
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What Can SVAR Models Tell us About the Impact of Public Expenditure Shocks on Macroeconomic Variables in Algeria? A Slight Hint to the COVID-19 Pandemic

Publicado en línea: 26 Nov 2021
Volumen & Edición: Volumen 21 (2021) - Edición 2 (December 2021)
Páginas: 21 - 37
Recibido: 07 Aug 2021
Aceptado: 15 Oct 2021
Detalles de la revista
License
Formato
Revista
eISSN
1898-0198
Primera edición
06 May 2008
Calendario de la edición
2 veces al año
Idiomas
Inglés
Abstract

Research background: Public spending is a generator of economic growth as well as its components; this reality is more depicted in the era of the COVID-19 world pandemic where a recession in economic activities has touched all countries.

Purpose: In this paper, we tried to study the impact of shocks in public expenditure on some macroeconomic variables in Algeria during the period (1970–2019).

Research methodology: The VAR Structural models were used to study the response of these variables to shocks in public spending in Algeria.

Results: The results of the modeling indicate a direct response of both exports and imports to a shock in the levels of public expenditure, but this response is relatively weak to the variable value of exports (especially in the short term), which is mainly due to the structure of the Algerian economy that is mainly dependent on the export of oil and gas, which in turn is mainly affected by international energy factors e.g. prices, supply, and demand. For the rate of inflation, there was an inverse response to shocks in the level of public spending. In the context of the global health and economic crisis, we will witness a further faltering of economic growth in Algeria.

Novelty: Our contribution is a new feature of the application of the SVAR model in the era of the COVID-19 pandemic that focused on analyzing the impacts of public expenditure on exports and imports

Keywords

JEL Classification

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