The Impact of Capital Account Liberalization on Economic Growth)1990-2018)

Abstract

The objective of this research is to study the relationship between capital account liberalization (of various features) and economic growth rate in Algeria during the period 1990-2018. We utilized the outputs of the Eviews software to monitor the developments of the study, utilizing the Augmented Dickey-Fuller (ADF) test and the ARDL-Bounds Test. By estimating the model according to the Autoregressive Distributed Lag (ARDL) approach, we concluded that a long-term relationship exists between Foreign Direct Investment (FDI), migrant remittances, external debt, and help with the economic growth, with a difference in the impact over the short and long terms. Consequently, Algeria is in need of deep reforms to attract the largest possible amount of foreign capital and to create an economic climate that contributes to attracting external flows to achieve economic growth.