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July 5, 2024Financial Markets Institutions and RisksOpen Access

The Impact of Public Expenditure on Inflation: An ARDL Approach

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Authors

FHFatma Zohra HamadoucheNational Higher School of Statistics and Applied Economy

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Implication

Time-series analysis reveals public spending increases inflation in Algeria, highlighting the necessity of fiscal discipline.

Key Points

  • A cointegration relationship links public expenditure and inflation in Algeria, showing that expanded government spending elevates consumer prices over time.
  • A 1% increase in public spending leads to a 0.23% rise in the inflation rate over the long term, exceeding short-term baseline estimates.
  • Auto-Regressive Distributed Lag bounds test estimation confirms model stability, highlighting that policymakers must maintain disciplined fiscal budgets.

Cite This Study

Fatma Zohra Hamadouche (2024) studied this question.

synapsesocial.com/papers/68e613c2b6db6435875a690dhttps://doi.org/10.61093/fmir.8(2).70-85.2024
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  1. 1Monetary Trends in the United States and the United Kingdom: Their Relation to Income, Prices, and Interest Rates, 1867-1975.1983 · 136 citations