The effect of the exchange rate on inflation - an econometric study on the Algerian economy using the ARDL method for the period 1995-2021

Abstract

This study examines the relationship between the official exchange rate and the rate of inflation for the state of the Algerian economy during the period (1995-2021) using the quantitative approach represented by the Autoregressive Distributed Lagging Time Lag (ARDL) model, to reveal the existence of a long-term equilibrium relationship between the dependent variable and the explanatory variable.

       This standard study concluded that there is a long-term equilibrium relationship between the two variables, and that the official exchange rate has a negative impact on inflation in the short and long term.