Has Algeria suffered from the dutch disease?

Gasmi, Farid and Laourari, Imène (2017) Has Algeria suffered from the dutch disease?: Evidence from 1960–2013 data. TSE Working Paper, n. 17-780, Toulouse

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Official URL: http://tse-fr.eu/pub/31559

Abstract

Algeria is strongly dependent on oil exports revenues to fuel its economy and following the 1986 oil counter-shock this country has experienced a persistent decline of its manufacturing sector. Although it has benefited from high oil prices over the last decades and implemented a myriad of economic reforms, Algeria has failed to develop its manufacturing sector and diversify its economy. One of the main mechanisms through which fluctuations in oil prices can constitute an impediment to the development of the manufacturing sector, and hence to long-term growth, in an economy that heavily relies on a natural resource exports is referred to in the literature as the Dutch disease. This paper aims to test whether or not Algeria’s economy has suffered from the main symptoms of this syndrome by analyzing data covering more than half-a-century. More specifically, we use annual data from 1960 to 2016 and investigate two important implications of this phenomenon that occur following an oil boom, namely, the spending effect and the resource movement effect. We perform some simple tests of these signs of the Dutch disease using a set of regressions while controlling for some other factors that could have led to similar economic symptoms. The results do not allow us to unambiguously claim that the Algerian economy has suffered from the Dutch disease over the period under study.

Item Type: Monograph (Working Paper)
Sub-title: Evidence from 1960–2013 data
Language: English
Date: March 2017
Place of Publication: Toulouse
Uncontrolled Keywords: Algeria, Oil revenues, Manufacturing sector, Dutch disease, Real exchange rate, Economic growth, Time series
JEL codes: C32 - Time-Series Models
O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology
O55 - Africa
Q32 - Exhaustible Resources and Economic Development
Q43 - Energy and the Macroeconomy
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 17 Mar 2017 14:42
Last Modified: 21 Mar 2018 14:36
OAI ID: oai:tse-fr.eu:31559
URI: http://publications.ut-capitole.fr/id/eprint/23206

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