The Effects of oil price shocks on the industrial sector in Algeria (1999:Q1-2022:Q1)

Chelghoum, Amirouche; Benali, Belazzouz

مجلة الاقتصاد والمالية
Volume 9, Numéro 2, Pages 231-248
2023-06-09

The Effects Of Oil Price Shocks On The Industrial Sector In Algeria (1999:q1-2022:q1)

Authors : Chelghoum Amirouche . Benali Belazzouz .

Abstract

This paper investigates the symmetric and asymmetric effects of real oil price shocks on industrial output in Algeria over the period 1999:Q1–2022:Q1. We use a linear autoregressive distributed lag model (ARDL), and nonlinear autoregressive distributed lag model (NARDL). The ARDL model reveals that the results seems to have been misspecified and the estimates are unstable. However, the NARDL model shows that only a real oil price increase seems to rise industrial output in the short-term. In the long-term, oil price increase (decrease) raised (reduced) the industrial output. Furthermore, we found that bank credit and inflation have a positive and negative effect on industrial output, respectively. The coefficients of discount rate and exchange rate are insignificant and reflect the ineffective of monetary policy and successive devaluation of the Dinar in improving the competitiveness of industrial sector in Algeria.