انعكاس تغيرات عرض النقود على مستوى العام الاسعار

Abstract

Money supply is the most important source of general-level-price increases and the emergence of inflationary pressures that have negative effects on all economic and social levels. This study aims to highlight the extent of the impact of changes in the money supply on Algeria’s general price levels during the period (1980-2018). To achieve the study’s goal, we touched on the theoretical framework of money supply and the general level of prices. Furthermore, we presented the relationship between them according to Friedman and Keynes, the most prominent economic thinkers. We noticed that a money supply contributed significantly to the rise in the general level of prices during all stages of the national economy. Moreover, other reasons that fueled inflationary pressures in local markets, such as imported inflation and currency value deterioration. Finally we found that the appropriate model for this study is: Autoregressive Distributed lag (ARDL) model. Using this model we were able to prove that there is a long-term equilibrium relationship between the inflation rate (the prices paid by consumers), the ratio of money supply in its broad sense to total reserves, the growth rate of the government’s general consumption expenditures, and the growth rate of the official exchange rate. We found that these variables affect the inflation rate in the same direction and at varying rates. Keywords: money supply; general price level; inflation; Autoregressive Distributed lag ARDL.