The impact of public expenditures on real exchange rate dynamics in Algeria
May 15, 2018
DOI: https://doi.org/10.1504/GBER.2018.091705
Published in: Global Business and Economics Review
Publisher: Inderscience
The objective of this study is to examine the role of government spending in economic diversification process of Algeria. This is achieved by investigating the impact of the government spending on the real exchange rate. This follows on works done on the topic of Dutch disease. The outcome of this study shows that although the relationship oscillates over time, the increase of the government spending leads to the depreciation of the RER. The findings underpin interesting implications with regards to the role of public finance management in the diversification of the economy of Algeria.