The Relationship Between the Quantity of Money and Economic Growth in Algeria During the Period 1970-2019: An Econometric Study Using the Cointegration Methodology and the Error Correction Model (ECM)

  • saad ouledlaid University of Laghouat
  • mustapha bourennane University of Laghouat
  • Ahmed benmouiza University of Laghouat
Keywords: Quantity of money, Economic growth, Cointegration, ECM

Abstract

The study focused on studying the relationship between the quantity of money and economic growth in Algeria by working on two time series for the period from 1970 until 2019, by using the Engle-Granger methodology and the error correction model ECM, with the aim of testing the existence of a causal relationship between the two variables and determining their direction in the short and long runs, thus the study concluded the existence of a causal relationship in the short run from the quantity of money towards the gross domestic product. Otherwise for the long run, the causation was in both directions, i.e. a circular relationship, which expresses a special case for Algeria that differs comparing with both the traditional theory and the Keynesian approach

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Published
2021-01-27
How to Cite
ouledlaid, saad, bourennane, mustapha, & benmouiza, A. (2021). The Relationship Between the Quantity of Money and Economic Growth in Algeria During the Period 1970-2019: An Econometric Study Using the Cointegration Methodology and the Error Correction Model (ECM). Dirassat Journal Economic Issue, 12(1), 253-271. https://doi.org/10.5281/zenodo.4477643
Section
Articles