خلاصة:
This paper develops an analysis of budget deficit financing in termsof a crowding out or crowding in effect on the activity of the privatesector for the economies of Iran and Algeria as two MENA countries,(because of its economic structures (dependence on oil revenue)) duringthe period 1970-2012 by using Cointegration and Vector ErrorCorrection approaches. The analysis confirms the existence of acrowding out effect in Algeria and a crowding in effect in Iran.Thoifs parpoewrddinevgeloupt soracroanwadlyinsgisinofeffuedcgt eotn tehfeicaicttfivinitaynoifnghein rteivrmates sector for the economies of Iran and Algeria as two MENA countries, (because of its economic structures (dependence on oil revenue)) during the period 1970-2012 by using Cointegration and Vector Error Correction approaches. The analysis confirms the existence of a crowding out effect in Algeria and a crowding in effect in Iran.
ملخص الجهاز:
"With this intention, and while following the approach of Blejer and Khan (1984) revisited by Mama et al (2002), we estimated a model of investment with flexible accelerator in which the possibility of the crowding out effect is estimated through its impact on the speed of adjustment of private investment on its desired level; the public expenditure of investment, the interest rate, the credit to the private sector and the rate of real exchange are the macroeconomic variables which we retained as being the main determinants of these mechanisms of adjustment.
This school, reasoning on the assumption of the full employment of the resources, explains that an excessive consumption today causes a reduction in savings and that in order to allow the equilibrium on the national financial markets, the interest rate must increase; consequently, these higher interest rates bring about the fall of the private investment (it is the more usual vision of the crowding out effect).
On a more sophisticated analytical level, Bailey (1971), Buiter (1977, 2010), Barro & Redlick (2010), David & Scadding and (1974) studied the relationship between private investment and public expenditure and mainly the crowding out effect which those exert, through several budgetary indicators, by decreasing the capacity of influence of the public sector on the economic activity.
3- A review of Empirical Studies: Bailey (1971), Buiter (1977, 2010), Buiter and Tobin (1978), David & Scadding (1974), Huixin & Leeper (2010) and Jongwanich (2010) which, we have just seen it, studied, from a theoretical point of view, the relationship between private investment and public expenditure and mainly this "crowding out effect", also justified it from the empirical point of view."