Abstract
This study examines the main determinants of inflation in Iraq during the period from 1995 to 2017. In this context, this paper focuses on the major sources to explain inflation trend in Iraq. As econometrics technique, the autoregressive distributed lag (ARDL) cointegration framework is employed. The main results show that inflation has been caused by an admixture of factors including increase of money supply, and shortage of aggregate supply mirrored by growth of domestic product, which depends heavily on the performance of the oil sector and its price. The imported inflation seems to be another cause of inflation. However, one should not ignore the political instability and the sanction imposed on the country, as well as the invasion followed by the occupation of the country by the USA in 2003. Based on the results reached, the control of inflation in Iraq needs a combination of fiscal and monetary policies.
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