The Impact of Monetary Policy on The Gross Domestic Product in The Iraqi Economy

Abstract

This study aims to test the impact of monetary policy on the gross domestic product in the Iraqi economy using time series analysis for the period 1985-2022 using the autoregressive time lag gaps (ARDL) model.

The results of the study showed that there is an inverse and significant relationship between the exchange rate and the gross domestic product according to the logic of economic theory. The results of the study also showed that there is an inverse and significant relationship between inflation and GDP according to the logic of economic theory. The results showed that there is a direct and non-significant relationship between the interest rate and the gross domestic product, contrary to the logic of economic theory. The results also showed that there is a direct and significant relationship according to the logic of economic theory between the money supply and the gross domestic product in the Iraqi economy. The results showed that there is a long-term equilibrium relationship between the variables of the study. The study also recommended the need for the central bank to follow an unconventional monetary policy in order to influence the gross domestic product by creating strong production bases.