This study investigates the relationship between inflation recurrent expenditure, capital expenditure, and economic growth in Algeria in 1980–2022, employing Granger causality and an ARDL model. The results obtained confirm the hypothesis on the existence of a cointegration relationship between public expenditure components, economic growth, and inflation; the long-term results show that recurrent expenditure has a positive and significant relationship with inflation — a 1% increase in current expenditures leads to a 2.14% increase in inflation. Furthermore, capital expenditure negatively and significantly impacts inflation (at a 10% significance level); an increase of 1% in capital expenditure leads to an approximately 1.08% decrease in the inflation rate. GDP per capita also hurts the inflation rate in the long term (at a 10% significance level). An increase of 1% in GDP per capita leads to a 2.94% decrease in the inflation rate. The exchange rate has a negative and significant impact on inflation; any increase in the exchange rate by 1% leads to a reduction in inflation by 1.31%. In the short term, capital expenditure is the only variable with a significant relationship with inflation, where a 1% increase drives inflation up by 1.08% in the same year and 1.13% in the next. The error correction term (-0.75) highlights a strong adjustment mechanism, with deviations from long-term equilibrium corrected within approximately 16 months. The causality test results suggest unidirectional causality from economic growth to inflation at the 5% significance level. The study recommends prioritizing recurrent expenditures for essential services while enhancing capital investments in infrastructure to support economic growth. Exchange rate stability should be maintained to mitigate inflationary pressures, particularly in import-dependent sectors. Efforts to foster GDP per capita growth should include supporting private sector development and job creation. Additionally, fiscal discipline, transparency, and robust monitoring systems for public spending are crucial to ensuring efficient use of resources and controlling inflation.

Despite the fact that the Economic and Social Commission in Western Asia (ESCWA) have experienced substantial economic growth, no one can guarantee that this is sufficient enough to reduce chronic unemployment, combat economic insecurity, alleviate poverty or reduce people's frustrations in regards to the increase in income and wealth inequality which has infiltrated many Arab countries. In fact, not all forms of growth are considered effective in promoting structural and social changes as well as enhancing people's standards of living. Consequently, the increasing concerns in regards to rapid and sustained economic growth has led world economies to discover alternative means to achieve this. As a consequence inclusive economic growth emerged and took hold as a new concept for the fulfillment of sustainable economic development. This paper formulates a new index known as the Inclusive Development Index (IDI) which is used to measure inclusive economic growth in 18 Arab countries within Western Asia for a duration of 17 years by using twelve indicators. It also compares IDI score rankings to GDP/capita score rankings, as well as compares the IDI results of the ESCWA countries to the world's most inclusive economies. The results show that some economies have higher GDP/capital rank but have lower IDI rank, indicating that their growth has not translated well into social inclusion. Other economies are ranked lower in GDP/capita but have a higher IDI rank, these economies have done particularly well at making their growth processes more sustainable and inclusive. This paper also discovered that ESCWA’s inclusive growth fell below the world’s most inclusive economies such as Norway, Sweden, Denmark, Island, and so forth. In this regard, the governments and policymakers of various countries within the ESCWA region must renew their efforts in making their economic growth more inclusive and ensuring equitable distribution of income to all population strata.

This study investigates the impact of remittances on income inequality in Lebanon using annual time-series data for the years 2000–2023. Applying Johansen’s cointegration test, with financial development (FD), GDP, and household consumption expenditure (HCE) as the control variables, the study examines the long-run and short-run relationship between remittances and inequality. The study also considers the moderating impacts of FD and HCE to account for their indirect role in the remittance–inequality relationship. Dynamic relations are also examined by using impulse response functions (IRFs) and Forecast Error Variance Decomposition (FEVD) analyses. The long-run model estimates validate that remittances and income inequality are significantly and negatively related, i.e., increased remittance receipts serve to reduce income inequality in Lebanon. Remittance effects, however, are statistically insignificant in the short run. Interestingly, the results reveal that financial development weakens the remittances’ inequality-reducing effect, dampening their impact. Contrarily, a higher household consumption expenditure slightly strengthens the inequality-reducing effect of remittances. A comparison between the pre- and post-2019 periods reveals that the explanatory strength of remittances weakened during times of economic crisis, since the function of remittances was different during times of economic distress. Based on these findings, this study recommends that Lebanon not only promote financial development but also focus on financial inclusion, improve social safety nets, and provide inclusive economic growth to maximize remittance inflow benefits and efficiently reduce inequality.