Testing the impact of the Double Deficit on Algeria’s Economic Growth, Standard Study 1982-2021.

Abstract

This standard study aims to test the impact of the double deficit on Algeria's economic growth, for the period 1982-2021, using the Johansson joint integration method, the Granger causality test and the FM-LOS method.

The study identified a long-term integration relationship between economic growth and various economic variables. Additionally, it assessed that there is no causal link between economic growth and either the budget deficit or the balance-of-trade deficit in either direction. However, it observed a one-way causal link from the budget deficit to the trade balance deficit, aligning with treasury theory. Moreover, the study found an expulsive relationship between the balance budget deficit and economic growth, as well as an inverse relationship between economic growth and the trade balance deficit, which is in line with economic logic.