The impact of financial liberalization policy on economic growth

An Econometric study of the Algerian case

Abstract

The existence of a strong and well-developed financial system is an essential condition for
achieving economic development in any country, through our study of the impact of financial liberalization
policy on economic growth in Algeria during the period of 1990-2014 using the method of cointegration and
VECM model. Johansen test results showed the presence of two cointegration relationships and this means
that there is a long-run equilibrium relationship between financial liberalization and economic growth in
Algeria. By estimating the relationship model in the long run using the FM-OLS method we reached a
positive and long-term relationship between financial liberalization and economic growth in Algeria