Analyzing the impact of exchange rate fluctuations and inflation on the GDP in Iraq using the modern methodology of cointegration for the period (1988-2020)‎

Other Title(s)

تحليل أثر تقلبات سعر الصرف و التضخم على الناتج المحلي الاجمالي في العراق باستعمال منهجية أنموذج ARDL للمدة (1988-2020)‎

Parallel Title

تحليل أثر تقلبات سعر الصرف و التضخم على الناتج المحلي الاجمالي في العراق باستعمال منهجية أنموذج ARDL للمدة (1988-2020)‎

Joint Authors

al-Bayati, Daliya Umar Nazmi
al-Dulaymi, Sayf Adil Sabbar
al-Mihimdi, Nadim Abd Allah Abid

Source

Journal of Economics and Administrative Science

Issue

Vol. 28, Issue 131 (31 Mar. 2022), pp.83-108, 26 p.

Publisher

University of Baghdad College of Administration and Economics

Publication Date

2022-02-28

Country of Publication

Iraq

No. of Pages

26

Main Subjects

Economy

Topics

Abstract EN

The research aims to analyze the impact of exchange rate fluctuations (EXM and EXN) and inflation (INF) on the gross domestic product (GDP) in Iraq for the period 1988-to 2020.

The research is important by analyzing the magnitude of the macroeconomic and especially GDP effects of these variables, as well as the economic effects of exchange rates on economic activity.

The results of the standard analysis using the ARDL model showed a long-term equilibrium relationship, according to the Bound Test methodology, from explanatory (independent) variables to the internal (dependent) variable, while the value of the error correction vector factor was negative and moral at a level less than (1% ).

The relationship between EXM and GDP was inverse, with partial flexibility for EXM (-7.666), meaning that an increase in EXM (1% ) will lead to a decrease in GDP (7.666% ).

This applies to the reality of the Iraqi economy, as the method used in recent times is to devalue the local currency.

The effect of EXN was steady in the long run, with the partial flexibility of EXN (5.785), that is, an increase of EXN (1% ) will lead to an increase in GDP (5.785% ), and the model as a whole is statistically significant.

The explanatory power of the model is high, as it was (R2=0.816), indicating that 81% of the changes in GDP in constant prices are due to the change in (EXM, EXN, and INF).

The study concluded that in light of the outbreak of the coronavirus, the disruption of most economic projects, and the decline in the prices of the Iraqi government, as a result of the decrease in the balance of oil and oil revenues, as a result of the balance of the government part of the solution is to devalue the local currency by controlling the nominal exchange rate.

At present, the Iraqi Monetary Authority recommends that the Managed Flexible Exchange System be continued as an effective means of avoiding external shocks for the Iraqi economy, as it allows for appropriate adjustments to be made continuously.

American Psychological Association (APA)

al-Bayati, Daliya Umar Nazmi& al-Dulaymi, Sayf Adil Sabbar& al-Mihimdi, Nadim Abd Allah Abid. 2022. Analyzing the impact of exchange rate fluctuations and inflation on the GDP in Iraq using the modern methodology of cointegration for the period (1988-2020). Journal of Economics and Administrative Science،Vol. 28, no. 131, pp.83-108.
https://search.emarefa.net/detail/BIM-1339967

Modern Language Association (MLA)

al-Bayati, Daliya Umar Nazmi…[et al.]. Analyzing the impact of exchange rate fluctuations and inflation on the GDP in Iraq using the modern methodology of cointegration for the period (1988-2020). Journal of Economics and Administrative Science Vol. 28, no. 131 (Mar. 2022), pp.83-108.
https://search.emarefa.net/detail/BIM-1339967

American Medical Association (AMA)

al-Bayati, Daliya Umar Nazmi& al-Dulaymi, Sayf Adil Sabbar& al-Mihimdi, Nadim Abd Allah Abid. Analyzing the impact of exchange rate fluctuations and inflation on the GDP in Iraq using the modern methodology of cointegration for the period (1988-2020). Journal of Economics and Administrative Science. 2022. Vol. 28, no. 131, pp.83-108.
https://search.emarefa.net/detail/BIM-1339967

Data Type

Journal Articles

Language

English

Notes

Includes bibliographical references : p. 106-107

Record ID

BIM-1339967