The impact of oil price volatility on economic development in Algeria

Abstract

The natural resource curse is one of the main issues that has attracted the attention of economic and political researchers at the moment, We studied this phenomenon by addressing to four main points: The first point dealt with the various theoretical trends that explain the specifics of the resource curse, The second point, in which we explained the effects of the phenomenon on the macroeconomic and political economy of resource-producing countries, The third point mentioned the most prominent channels that help to contain the phenomenon, In the fourth point we studied the effect of oil price volatility on some variables of macroeconomics (Gross domestic product, Public Spending, unemployment rates,Real effective exchange rate)by using the co-integration test and the vector error correction models to analyze the variance decomposition and the impulse response functions. Finally, we conclude that the volatility of oil prices has an adverse effect on the economic development in Algeria, and that Algeria is suffering from a resource curse.