Measuring the Impact of the General Budget Deficit on the Trade Balance Deficit in Algeria for the Period 1990–2020

Abstract

The study aims to describe, analyze and measure the impact of the general budget deficit on the trade balance deficit in Algeria for the period 1990–2020, through the application of the VAR autoregressive ray model. The study concluded that there is a direct relationship between the two variables, indicating that the rise in the general budget deficit contributes to raising the trade balance deficit. The analysis of the response and variance countries also showed that there is a positive significant effect of the general budget deficit on the deficit of the Algerian trade balance in the short term, but no effect in the long term. This study contributes to the current literature by using the VAR model to analyze the impact of the general budget deficit on the trade balance deficit in Algeria for the period 1990–2020. It is measured through the balance of the general budget and of the trade balance. The study shows that there is a strong positive impact and statistical significance of the general budget deficit on the trade balance deficit.