An Econometric Analysis of the Impact of Fiscal and Monetary Policies on Economic Well-Being in Algeria (2000–2023) Using Hanke’s Economic Misery Index

Résumé

This study aims to analyze the impact of fiscal and monetary policy and its impact on economic well-being in Algeria during the period 2000–2023. Hanke’s Misery Index is utilized as the dependent variable, while government spending and budget balance are considered independent variables representing fiscal policy trends. Additionally, money supply growth and loans to the economy serve as indicators of monetary policy, with institutional quality included as a control variable. To achieve this objective, the ARDL model is employed.

The results indicate the existence of a long-term equilibrium relationship between the studied variables. The study showed that the dominant fiscal policy had a significant positive impact on the misery index in both the short and long term. As for money supply growth, it exhibited a negative effect in the short term, but became positive in the long term due to the unsustainability of monetary policy. Furthermore, neither the loans extended to the economy nor the institutional quality index showed any significant long-term effect .