Analysis of the Impact of Trade Shocks on Some Macroeconomic Variables in Iraq for the Period (2004-2020)

Abstract

This research was presented to address a realistic problem affecting the Iraqi economy and its overall variables due to its rentier nature related to the oil sector. The right conditions to curb its negative effects. The research aims to analyze the impact of trade shocks on some macroeconomic variables represented by (Gross Domestic Product, Public Expenses, and Exchange Rate in the parallel market) for the period (2004-2020).The results of the analytical side showed the inherent rentier nature of the Iraqi economy and almost complete dependence on the revenues of crude oil exports. This indicates the failure of policies and the absence of economic planning, as it concluded that there is a strong direct response between trade shocks and both (GDP and Public Expenses), and an inverse response between trade shocks and the exchange rate. The research recommends the establishment of a sovereign fund to benefit from it in achieving economic stability and compensating for the severe shortage when adverse shocks occur.