دراسات اقتصادية
Volume 20, Numéro 3, Pages 263-280
2026-10-28
Asymmetric Oil Price Shocks And Fiscal Spending Procyclicality In Algeria: A Nonlinear Ardl Approach
Authors : Azzeddine Nadia .
Abstract
This study investigates whether Algeria's fiscal spending reacts to shocks to the price of oil in a procyclical and asymmetrical manner between 1993 and 2024. Because hydrocarbon revenues play a major role in determining the amount of fiscal space available for public spending, the analysis uses a nonlinear ARDL framework that breaks down changes in oil prices into positive and negative components so that their unique effects on the growth of government spending can be evaluated. The results indicate a stable long-run relationship and show that government expenditure in Algeria is both procyclical and asymmetrically affected by oil price movements. Positive oil price shocks and real GDP growth increase expenditure growth, while inflation has no significant independent effect. These findings support stronger expenditure-smoothing mechanisms and fiscal stabilization buffers.
Keywords
Oil price shocks ; Fiscal spending ; Procyclicality ; Nonlinear ARDL
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