Balance of Payments as a Monetary Phenomenon: An ARDL Bounds Test Method for Algeria

• Autorzy: Azeddine Ghilous , Adel Ziat
• Języki publikacji: EN

Abstrakty

EN

Research background: Every country attempts to improve its balance of payments (BOP) positionto enhance macroeconomic policy. Algeria, like many developing countries, is experiencing a BOPdeficit. This raises concerns about the reasons for this deficit and prioritizes the quest for potential answers.Purpose: In the context of the Monetary Approach to the balance of payments (MABP), this paperinvestigates the long-run relationship between domestic credit, inflation, interest rate, GDP, and net foreignassets to find whether BOP is a monetary phenomenon in Algeria from 1980 to 2019.research methodology: The Autoregressive Distributed Lag (ARDL) bounds test, combined with thecritical approximation p-values of Kripfganz and Schneider (2020), has been applied.results: The findings clearly showed a long-run relationship among the variables. The long-run estimatesstrongly supported MABP propositions, and domestic credit had a negative and statistically significantinfluence on net foreign assets. This suggests that Algeria's BOP is a monetary phenomenon, and excessmoney supply played a crucial role in Algeria's balance of payments disequilibrium.novelty: The contribution of this paper is the use of the ARDL bounds test in combination with thenovel critical approximation p-values of Kripfganz and Schneider (2020), which provided more robust results. This study could help monetary authorities to elaborate the suitable policies in dealing with BOPproblems in Algeria. (original abstract)

Słowa kluczowe

EN

Balance of payments; Cointegration; Macroeconomic policy

PL

Bilans płatniczy; Kointegracja; Polityka makroekonomiczna

• Czasopismo: Folia Oeconomica Stetinensia
• Rocznik: 2023
• Numer: vol. 23, iss. 1
• Strony: 64--83

Twórcy

autor

Azeddine Ghilous

• Farhat Abbas University Setif, Setif, Algeria

autor

Adel Ziat

• Farhat Abbas University Setif, Setif, Algeria

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Identyfikatory

DOI

10.2478/foli-2023-0004