Assessing the Dutch Disease Impact on the Equilibrium Real Exchange Rate's Performance in Algeria 1990 - 2016

Abstract

This study is intended to examine the dutch disease theory and asses its impact on the performance of the equilibrium real exchange rate in Algeria over the period of 1990 - 2016 since it is dependent heavily on oil revenues. To do so, we first provided a theoretical background for the dutch disease, real exchange rate and balance of payments, as well as their reality, then, we proceeded to performe the ARDL bound-testing model to test our two underlying hypotheses. As expected our estimates suggest that the long-run real exchange rate's performance depended,essentially, having significant positive signs, on the technological progress (Lprod), government spending (Lgs), capital flows (Lcf), informal employment (Lemp)......