Publications 

Abstract

 This paper analyzes the potential benefits of an alternative exchange rate regime proposed by Jeffrey Franke, called the Commodity-Currency Basket (CCB) regime, over the current exchange rate regime in Algeria. The CCB regime, which combines the advantages of both floating and fixed exchange rate systems, has been suggested as a way to mitigate the negative impacts of oil price volatility on the economies of countries that heavily rely on oil exports. We use wavelet analysis and quantile-on-quantile regression techniques to estimate and evaluate the impact of the CCB regime on internal and external balance indicators in Algeria, including inflation rates and foreign exchange reserves, from 2001 to 2021. The findings suggest that the CCB regime is superior to the current floating exchange rate system in terms of maintaining monetary stability and achieving internal and external balance, while also providing more flexibility and stimulation to the domestic economy due to its ability to achieve terms of trade stability through an active countercyclical monetary policy. However, the proposed regime remains subject to further discussion, adjustment, experimentation, and development

Keywords: Exchange rate regime, Currencies-Plus-Commodity Basket, Wavelet analysis, Quantile-on-Quantile regression, Inflation rates, Foreign exchange reserves, Algeria.

Type:  Working Paper.

Journal: ERF Working Papers Series.

Abstract

 This study aims to investigate the macroeconomic effect of oil price shock in Algeria at different levels of oil dependency. To do this, an extensive version of small open DSGE model developed by Medina and Soto (2005) has been used. This version of DSGE model is attentive to the fact that the Algerian economic structure is characterized by oil dependency, among other structural characteristics. After we calibrate model parameters, this paper presents simulation results for positive oil price shock to illustrate how the structure of the model and its theoretical underpinnings shape the transmission of the shock to real variables of the domestic economy. In particular, the paper shows 3D impulse responses for oil price shock and characterizes their impact on real GDP, CPI inflation, external position, and real effective exchange rate. The results show that when the level of oil dependency changes, real oil price shock affects differently on the key macroeconomic variables. High oil dependence makes the economy more vulnerable to oil price fluctuations compared to low oil dependence. Therefore, structural transformation is a clear necessity for the Algerian economy.

Keywords: Business Cycles Fluctuation, oil-exporting economy, DSGE Model, oil dependence, Algeria.

Type:  Article.

Journal: Les Cahiers du CREAD.

Abstract 

The financial sector is often seen as the economic nervous system. Various theoretical literature underscores the significance of financial services provided by the financial system in propelling industrialization and development. In the early 1990s, Algeria embarked on financial sector liberalization to enhance its contribution and activate its role in economic financing. This paper intends to examine the influence of financial sector development on the growth of Algeria's manufacturing sector from 1999 to 2019. The results of the ARDL model estimation reveal that the volume of loans extended to the private sector and the money supply exert a negative impact on the long-term performance of the industrial sector (MVA). Conversely, an increase in the nominal interest rate demonstrates a positive effect on the added value in the manufacturing sector.

Keywords: Financial development, industrial sector, Algerian economy, ARDL model.

Type:  Book Chapter.

Book: Manufacturing Sector in Algeria

Abstract 

This paper aims to analyze and evaluate the role of fiscal and monetary policy interaction in confronting the negative effects of oil price fluctuations on macroeconomic variables in oil-exporting economies. To do this, the small open DSGE model developed by Median and Soto (2005) has been expanded to fit the structural characteristics of the Algerian economy as an oil-exporting economy. Using the Calibration Method, we simulate the effect of a random positive shock in oil prices under four different interactions of monetary and fiscal policy. The results show that the adoption of a pro-cyclical fiscal policy by fiscal authority along with CPI inflation targeting by the Central Bank is the most appropriate combination, among the four combinations studied, to reduce the negative effects of oil prices.

Keywords: oil-exporting economy, monetary policy, fiscal policy, exchange rate, oil price shock, Algeria.

Type:  Article.

Journal:  International Journal of Economic Studies.

Abstract 

This paper will study the impact of the negative shock in oil prices on the most important macroeconomic variables under two different frameworks of fiscal policy: the first includes a fiscal policy and the second includes a neutral fiscal policy. To do this, the small open DSGE developed by Median and Soto (2005) was expanded to fit the structural characteristics of the Algerian economy as an oil-exporting economy. After calibrating the parameters of the model and simulating the effect of oil shock using the dynare. The results show that after a negative shock in oil prices, the government's adoption of a procyclical fiscal policy will contribute significantly to the amplification and continuation of the impact of this

shock on various macroeconomic variables such as GDP, inflation, real exchange rate, and consumption.

Keywords: oil-exporting economy, fiscal policy, real exchange rate, DSGE model; oil price

shock, Algeria.

Type: Conference Paper.

Conference: Monetary and financial trends of the Algerian economy in light of regional and international economic developments, Djelfa University, Algeria.

Abstract

This paper aims to estimate the hybrid New Keynesian Phillips curve for Algeria in the period 1994-2011. In the first part, the hybrid New Keynesian Phillips curve is discussed theoretically to highlight the equation to be estimated. The second part is devoted to the presentation of the data. The obtained results confirm those obtained in the literature. Our data analysis suggests that the nature of inflation dynamics in Algeria doesn’t match the hybrid New Keynesian Phillips curve.

Keywords: Inflation, Phillips curve, Output gap, Algeria.

Type: Article

Journal : Les Cahiers du CREAD.