The Effect of Monetary and Financial Policy Shocks on Economic Growth in Algeria During The 1990-2024 Period Using the Nardl Model

Abstract

This study aims to analyze the impact of monetary and fiscal policy shocks on economic growth in Algeria during the period 1990-2024 using the NARDL model.

Using the NARDL model, the study’s findings reveal that economic growth in Algeria is influenced by monetary policy shocks. Specifically, a one-unit decrease in the required reserve ratio stimulates economic growth by 0.13 units, whereas a one-unit increase reduces economic growth by 1.195 units. The results also indicate that economic growth is positively affected by the size of the labor force. In contrast, fiscal policy showed no significant impact on economic growth during the study period.