Revue algérienne d'économie et gestion
Volume 19, Numéro 1, Pages 249-265
2025-06-01

The Causal Link Between Financial Development And Economic Growth: Empirical Evidence From Algeria, 1980-2022

Authors : Bouchenaki Fatiha . Bouras Nassima .

Abstract

Despite the various studies, both theoretical and empirical, the problem of the link between financial development and economic growth remains a controversial issue. The main objective of this article is to clarify the nature of such relationship in Algeria. In this context, the various estimates were carried out using the autoregressive approach with staggered lags (ARDL), for the period from 1980 to 2022. The study reveals that financial development negatively impacts Algeria's economic growth, despite recent sector improvements.The Granger causality test shows a unidirectional relationship between economic growth, commercial bank assets, and M2 money supply.

Keywords

financial development ; economic growth ; Algeria ; ARDL