Politická ekonomie 2025, 73(4):584-614 | DOI: 10.18267/j.polek.1464

Interactive Impacts of Remittance Inflows on Economic Growth in Algeria: Is the N-shaped Hypothesis Valid?

Hicham Ayad ORCID..., Amina Bendahmane ORCID..., Mohamed Driouche Dahmani ORCID...
Hicham Ayad (corresponding author), University Centre of Maghnia, LEPPESE laboratory, Algeria; Research Centre for Applied Economics for Development - CREAD, Algiers, Algeria
Amina Bendahmane, Research Centre for Applied Economics for Development - CREAD, Algiers, Algeria
Mohamed Driouche Dahmani, Djillali Liabes University, Sidi Bel Abbes, Algeria; Research Centre for Applied Economics for Development - CREAD in Algiers, Algeria

This investigation explores the influence of remittances on economic growth in Algeria during the period 1970–2022 using the Fourier autoregressive distributed lags (FARDL) model. This study provides new insights by suggesting an N-shaped association between remittances and economic growth. The findings reveal a nonlinear relationship between remittances and growth in Algeria. Initially, the impact of remittances on income is positive, then becomes negative when they exceed a threshold of 1.2% of GDP, and later becomes positive again when remittances surpass a second threshold estimated at 1.894% of GDP. These results highlight the importance of increasing remittance inflows to promote development in Algeria and urge decision-makers to create conditions that encourage the inflow of these funds through official channels

Keywords: Remittances, economic growth, N-shape association, Algeria, FARDL model
JEL classification: C22, F22, F24

Received: December 24, 2023; Revised: September 2, 2024; Accepted: September 30, 2024; Prepublished online: August 7, 2025; Published: August 27, 2025  Show citation

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Ayad, H., Bendahmane, A., & Dahmani, M.D. (2025). Interactive Impacts of Remittance Inflows on Economic Growth in Algeria: Is the N-shaped Hypothesis Valid? Politická ekonomie, 73(4), 584-614. doi: 10.18267/j.polek.1464
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