les cahiers du mecas
Volume 10, Numéro 1, Pages 31-40

The Impact Of Oil And Gas Rent On Promoting Economic Growth In Algeria

Authors : Matallah Siham . Smahi Ahmed .

Abstract

This study examines the impact of oil and gas rent on promoting economic growth in Algeria over the period (1980-2010) using Engle-Granger cointegration test and error correction model , findings indicate that both oil and gas rent have a positive impact on enhacing economic growth in Algeria in the long term , error correction model confirms the existence of positive relationship between variables in the long and short term for two models. These results emphasize the great dependece of Algerian economic growth on oil and gaz rent.Thus, Algerian government must carefully lead the process of allocating and monitoring the use of oil and gas revenue and turning it into positive economic growth. Furthermore, policymakers should care more about economic activities diversification in order to reduce the dependence on oil and gas sector, as well as rent seeking activities, especially with the appearance of alternative forms of energy (such as wind, water, and solar power).

Keywords

Oil Rent, Gas Rent, Economic Growth, Algeria, Cointegration test.