The impact of trade openness on the general equilibrium in the Algerian economy (1990-2020)

This study aims to formulate econometric models to determine the impact of trade openness on the general equilbrium in the Algerian economy using the (I.S-L.M-P.B) model. It became evident that a state of equilbrium can be achieved at low levels of output, interest rates, and the price index (inflation). For instance, the equilbrium output represents 88.11% of the (G.D.P) for the year 2022. The equilibrium interest rate represents (-37.5%) of the interest rate for the year 2022, which was 8%. Additionally, the equilbrium price level represents (-1.18%) of the actual price index for the year 2022. In addition, in order to boost the Gross National Product to its actual value, an expansionary fiscal policy should be adopted through increasing government spending, as it is an effective policy to achieve the general economic equilibrium and reach an interest rate capable of encouraging investment.