Analysis of the Reality of Financial Shocks on Inflation Rates in the Iraqi Economy for the Period (2004-2019)
Keywords:
financial shocks, government spending shock, government revenue shock, inflation ratesAbstract
The research focuses on analyzing the impact of financial shocks on inflation rates in the Iraqi economy for the period (2004-2019). Surprise in each of inflation, unemployment, or the rate of economic growth...etc., without these countries having a direct and influential role in determining or controlling these events. The reduction and reduction of shocks indicate the quality of economic policy in a country and the clarity of visions, The future, and knowledge of the state of the economy. Decision-makers can intervene by controlling several financial and monetary variables to achieve balance. However, failure to achieve balance causes financial or monetary shocks, which affect many variables. The authorities may sometimes deliberately cause these Shocks when you aim to achieve a specific goal, such as addressing inflation or unemployment.
One of the most important results of the research is that adverse financial shocks hurt economic activity, which intensifies with the weakness of responsive policies to these shocks, in addition to the absence of economic philosophy, the severity of structural imbalances, and the unbalanced integration with the outside world that has made the Iraqi economy responsive to shocks and incubating their economic and social effects, especially External ones, and perhaps the shock of oil prices is a clear example of these factors, despite the enormous financial resource that was achieved as a result of it, the Iraqi economy did not benefit from it in building safe buffers from external shocks that it could be exposed to at any time. This made the stability of crude oil prices or any disturbance in oil marketing (external shock) reflected directly on the economy through government revenue and spending (as an internal financial shock). The latter witnessed a significant decline in 2015 due to the drop in oil prices, and it is reflected in inflation rates in the Iraqi economy.
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