Abstract:
Despite the benefit achieved by the Algerian economy as a result of the positive shocks to
oil, through which it was able to bring significant financial savings, which contributed
greatly to the development of its infrastructure, it was not able to achieve ambitious
development rates that contribute to the desired economic and social renaissance of the
country. Not even supportive of the rest of the sectors, but remained trapped in the oil
sector, to be inflicted by the curse of natural resources.
The weak economic performance of oil-exporting developing countries, including Algeria, is
due to the way the fiscal policy responds to oil price shocks. However , the large correlation
between oil revenues and public budget revenues has led to the instability of public
spending policy in the national economy ,as it has become the most important channel
through which oil price fluctuations are transmitted to the rest of the macroeconomic
variables, hence the problem of the study, which reflected the results that like any other
commodity , oil prices are affected by supply and demand, but this is not sufficient to
explain the fluctuations in oil prices .Thus, there are other factors that make them fluctuate
and change according to the prevailing conditions outside the market : politics ,
Technology ,environment ,international energy organizations , natural disasters , new
fossils..etc . On the other hand, there is a weak relationship between public spending and
the macro variables selected as an interface for economic stability in Algeria; for standard
modeling has shown limited and insignificant impact of the total public spending on GDP ,
regarding the inflexibility of the production system.
In fact , and as a positive relative and temporary impact, we noticed the weak record
impact of public spending on inflation rates, while the results have shown that public
spending as an influential factor is highly related to the trade balance and unemployment
rates in Algeria during the study period, that is due to the conflict between the principle of
the expenditure multiplier with the weak flexibility of the productive system in Algeria
