ملخص البحث :

ملخص البحث :

This paper estimates the impact of external shocks, especially oil shocks, on major macroeconomic variables – Real Gross Domestic Product, Government Expenditure, Inflation rates and Unemployment Rates – in the Iraq economy with quarterly data covering the period Q1 1990 to Q4 2018. In this study we have used a restricted VAR model and Johansen Co-integration test and Impulse Response Functions to investigate the impact of oil price shocks on the Iraq economy. Our results indicate that despite the decline in oil revenues as a percentage of GDP to 28.6% in 2015 compared with 42.4% in 2014. This was not accompanied by a decrease in public expenditure, because a large part of government spending goes to the operational budget, which is characterised by a high stability as a result of the increase of government spending on military operations for the purpose of extending security stability. Therefore inflation rates have only slightly changed, as the money supply in the Iraqi economy has not changed despite the changes in oil prices. We believe this is due to the extensive size of the Operating Budget, which is relatively stable at the expense of the Capital Budget, 30% at best for the duration of the research