The impact of coordination between monetary and fiscal policy on Algeria’s balance of payments

Analytical end econometric study during the period (1990-2020)

Abstract

This study aims to analyze and measure the impact of monetary and fiscal policy coordination on Algeria’s balance of payments during the period 1990-2020, The descriptive approach was adopted by describing the general concepts of monetary policy, fiscal policy, and balance of payments, as well as the analytical approach by analyzing the monetary and financial situation and the balance of payments of the Algerian economy during the study period, in addition to the experimental approach based on the Vector Autoregressive model VAR, The M2 monetary mass was used as an indicator of monetary policy, public expenditures as an indicator of fiscal
policy, and the total balance of payments as an indicator of the balance of payments in Algeria in US dollar. The study concluded econometrically, based on the variables of the study, that both monetary and fiscal policies did not affect the balance of payments due to the existence of a oneway causal relationship between the M2 monetary mass and the balance of payments from the balance of payments towards the monetary mass. In addition, there is a non-causal relationship between public expenditures and the balance of payments on the one hand and the absence of the package of institutional arrangements necessary for coordination between monetary and fiscal policies in the national economy on the other hand