The impact of real oil revenues fluctuations on economic growth in Algeria: evidence from 1960-2015 data

LAOURARI, Imène and GASMI, Farid (2016): The impact of real oil revenues fluctuations on economic growth in Algeria: evidence from 1960-2015 data.

Abstract

This paper investigates the impact of real oil revenues fluctuations on economic growth in Algeria using data from 1960 to 2015. To shed some new light on this question, we use a measure of real oil revenues recently developed by Gasmi and Laourari (2015) that is endogenous to Algeria’s international trade structure. We apply the Johansen multivariate cointegration approach to analyze the short-run and the long-run dynamic relationship between real oil revenues and economic growth proxied by two variables, namely, real GDP and industrial sector growth. The cointegration analysis suggests that a long-run relationship exists between real oil revenues, real GDP, and industrial growth in Algeria. The impulse response function and the variance decomposition analysis suggest that the impact of unexpected shifts in real oil revenues on the country's economic and industrial growth is negative.

• Item Type: MPRA Paper
• Language: English
• Keywords: Algeria, Real oil revenues fluctuations, Economic growth, Industrial sector, Time series.
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q32 - Exhaustible Resources and Economic Development

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