مجلة البشائر الاقتصادية
Volume 12, Numéro 2, Pages 256-279
2026-09-01
Money Supply And Inflation Dynamics In Algeria And Egypt: A Comparative Ardl Bounds Testing Analysis, 1990–2025
Authors : Bakadi Messaoud .
Abstract
This paper examines the money supply–inflation nexus in Algeria and Egypt over 1990–2025 using the ARDL bounds testing approach. Annual data are used to estimate two harmonized country-specific models. The results indicate cointegration in both countries, while revealing different monetary transmission dynamics. In Algeria, nominal broad-money growth has a positive and significant short- and long-run effect on inflation, alongside a strong exchange-rate channel. In Egypt, broad-money growth also has a positive and significant long-run effect, but its short-run transmission occurs with a lag, while exchange-rate depreciation exerts an immediate inflationary effect. The error-correction terms are negative and significant in both models, confirming convergence toward long-run equilibrium. Overall, the findings identify a common positive long-run monetary effect, with more immediate transmission in Algeria and delayed transmission in Egypt..
Keywords
Money Supply ; Inflation Dynamics ; ARDL Bounds ; Testing
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