The impact of financial liberalization policy on economic growth

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