Prof. Aden Hussein Hussein Younes

Prof. Safaa Abdul-Jabbar Ali Al-Mousawi

M. Salam Kazem Affair

Abstract

       For International Reserves an important role in achievement of economic stability, particularly the stability of the Balance of Payments, whether it is directly across the address the imbalance suffered by the balance, especially in times of crisis, or indirectly through an intermediary variable as the rate of exchange or interest rate. So most of the economies worked to maintain an appropriate size of International Reserves in order to ensure the achievement of the goal of economic stability.

      Economies differ in the sources of the accumulation of International Reserves, according to the level of economic development and the nature of the resulting structure, as these sources vary in the advanced economies and with diversified production structure, while a larger role in the formation of the Reserves for the one sector in rentier economies. This makes the domestic economy more vulnerable to economic shocks.

      In this research we will try to clarify the role of International Reserves in the stability of the Balance of Payments of the Algerian economy for the period 19882014, Measurement and analysis of the nature of the vulnerability and the impact of their list, and this is done through the use of economic measurement, which is one of the advanced quantitative methods in this field. It was used to Model (VAR), which depends on a range of tests, including the root of unity and Common Integration and Causality Testing.