The Impact Of Inflation Levels On Financial Development In Algeria During The Period (1991-2022)

Abstract

Financial development poses a challenge to central banks that target inflation within their monetary policy, so we aim through this research to measure the impact of inflation levels on financial development in Algeria during the period 1991-2022. And using the ARDL model, we found that financial development in Algeria is negatively affected, starting from the TAR inflation threshold estimated at 2.927%, the structural nature of the Algerian economy also positively affects the development of the financial sector, making it linked to the degree of economic maturity. Therefore, we recommend promoting diversifying the Algerian economy while taking into account the follow-up of an inflation-targeting monetary policy.