The impact of external shocks on economic development in Iraq for the period 1980-2020 using the (NARDL) model

Abstract

The results of estimating the (NARDL) model showed the negative and positive effects of the variables of oil prices and inflation on foreign trade, as positive changes in oil prices have a positive and significant effect on trade, while negative changes in oil prices can have a negative effect on trade, but they have a significant effect only when 10% significance level The model estimation results showed that a favorable shock in crude oil prices of 1% would lead to a decrease in gross domestic product (GDP) by 1.152%, a decrease in unemployment by 0.3112%, a decrease in public expenditures by 0.4631%, and an increase in foreign trade by 5.8935%. The results also showed that the occurrence of a shock Favorable inflation of 1% leads to an increase in output by 0.6534% and a decrease in unemployment by 0.013%. The Iraqi economy is a rentier economy and the oil sector dominates the total value of the gross domestic product. It suffers from structural imbalances due to weak policies and programs taken by the government. As a result, it faced many external shocks, the effects of which were reflected in economic development