The impact of Public Expenditure on Inflation Rate in Algeria during the period 1986- 2016

Abstract

This study aimed to measure the impact of public expenditure on inflation rate in Algeria during the period 1986- 2016. It builds on the tests used and applied in modern econometrics to analyze the properties of time series in terms of stationary property and rely on standard tests that fit with these properties, as well as on the Johansen co-integration method; where after confirming the lack of a co-integration, we estimate the vector autoregressive model .With the help of the econometric analysis program (EVIEWS-9), we proceed to the analysis and measurement of the impact of public expenditure on inflation rates in Algeria. The estimation of the vector autoregressive model and the results obtained have shown the presence of a negative impact of management expenses and a positive impact of processing expenses respectively on inflation rates in Algeria.