Coordination between fiscal and monetarypolicy in Algeriafor the period of 1970-2019

An EmpiricalStudy By Applying The ARDL Model

Abstract

This studyaims to know the Relationship between fiscal policy and monetarypolicy in Algeriaduring the period (1970-2019) using the ARDL model, the resultsshowedthat the fiscal policyisaffected in the long term by inflation, money supply and oilpriceswhile in the short term of the interest rate and oilprices, as for monetarypolicy, they are affected in the long run by the interest rate and the budget balance, while in the short term to the budget balance only. Theseresultsconfirmthat the money supply in Algeriaislargelyaffected by fluctuations in changes in the budget balance and thisindicatesthat the monetarypolicyis not completelyindependent and thatitresponds to the requirements of fiscal policy and therefore the prevailing system in Algeriais a non-Ricardian system and itconfirms the validity of the fiscal theory of priceslevel