The effect of oil price changes on some macroeconomic variables in Iraq

Ali Hameed Shati Al-qariri¹ Hossein Sharifi Renani² Munaf Marza Neama Radi³ Sara Ghobadi⁴

1) 1. PhD student in Economics, Isfahan Branch (Khorasgan), Islamic Azad University, Isfahan, Iran,
2) 2. Associate Professor of Economics, Isfahan Branch (Khorasgan), Islamic Azad University, Isfahan, Iran (corresponding author),
3) 3. Assistant Professor of Economics, University of Al-Qadisiyah, Al-Diwaniyah, Iraq,
4) 4. Assistant Professor of Economics, Isfahan Branch (Khorasgan), Islamic Azad University, Isfahan, Iran,

Publication : International Conference on International Trading, Economic Studies & Human Sciences (hestconf.com)
Abstract :
In this research, the aim is to investigate the oil price changes and its effects on the macroeconomic variables in Iraq for the period between 1990-2021. For this purpose, in this study, a vector autoregression model (VAR) is used to investigate the impact of oil price changes on macroeconomic variables including GDP, money supply, exchange rate, government size, and non-oil trade. Then, using instantaneous reaction functions, the reaction of macroeconomic variables in the event of a shock in the price of oil has been investigated. The findings of the research showed that although the changes in oil prices have fluctuated the macroeconomic variables investigated in the research in the short term, they have ultimately led to the improvement of the economic situation of Iraq during the period under investigation.
Keywords : In this research the aim is to investigate the oil price changes and its effects on the macroeconomic variables in Iraq for the period between 1990-2021. For this purpose in this study a vector autoregression model (VAR) is used to investigate the impact of oil price changes on macroeconomic variables including GDP money supply exchange rate government size and non-oil trade. Then using instantaneous reaction functions the reaction of macroeconomic variables in the event of a shock in the price of oil has been investigated. The findings of the research showed that although the changes in oil prices have fluctuated the macroeconomic variables investigated in the research in the short term they have ultimately led to the improvement of the economic situation of Iraq during the period under investigation.