MEASURING THE IMPACT OF THE FINANCIAL DEVELOPMENT ON THE ECONOMIC GROWTH IN ALGERIA

Abstract

The developed banking system is considered as a key factor for the economic growth. The importance of this system is through the significant services done in economy such as mobilizing the local savings as deposits, offering loans, monitoring business managers, solving risks and facilitating the financial transactions. This research aims to measure the impact of the banking development on the economic growth in Algeria using some indicators such as the bank credit divided on the gross domestic product (GDP), money supply to GDP, quaisi money to GDP using the co-integration method. Thus, we concluded that there is no relationship between the financial development and the economic growth in Algeria, and that the improvement in the fiscal and monetary indicators is primarily due to other factors such as the rising if fuel prices.