A economic and econometric study of the relationship between the public budget deficit, money supply and inflation, in the Algerian economy, during the period 1980-2010

Abstract

The aim of this paper is to determine the nature of the relationship between both the inflation rate on the one hand and the deficit in the state budget and the growth of the monetary mass on the other hand in the Algerian economy during the period 1980-2010, in the sense of testing each of the hypothesis optimal Money Sovereignty and Quantitative Theory of Money Using Regression Models.

We pointed  in the research to the basic features of the Algerian economy during the study period, and also a descriptive study of each of the public financial variables, inflation and the development of the monetary mass, In the last, the econometric study of the variables specified in the research, as the quantitative theory of money was proven by the existence of a positive relationship between the inflation rate on the one hand and the growth of the monetary mass on the other hand, but the current study did not prove a hypothesis Optimal Money Sovereignty In the Algerian economy, we did not find a statistically significant relationship between inflation and the budget deficit.