The relationship between public spending and economic growth in Iraq, using the VAR model analysis | ||
| Journal of Administration and Economics | ||
| Article 1, Volume 0, Issue 106, October 2018, Pages 14-35 | ||
| Authors | ||
| O.d.abd Karim Abdullah Mohammed; Qais Anis Jehal | ||
| Abstract | ||
| Public expenditure regarded as an engine of economic activity and a source of income for a large number of the Iraqi society. In addition, the huge of the amount of this expenditures which come from the revenue of oil sector . Thus expenditure occupied an important role in the Iraqi economy and should be directed in away to induce the ability of its economy and remedy the problem. That threats its future in order to straight the principle of sustainability. Economic growth also considered as an indicator measure the level and development at the ability of national productivity, so all the countries persist (go ahead) in evaluating the process of economic growth because it regarded as a main target in their political, social and economic program, because it plays an essential role in rising the stander living and lessen unemployment. So satisfying economic growth means a high level of welfare, and the progress (achieved) by economic policy. The aim of this study is to measure and analysis the mutual relationship between public expenditure and economic growth in Iraq The hypothesis adopted in this study states that: The increase of public expenditure did not have any impact upon economic growth for the period under consideration and the rate growth comes from one sector (oil sector). And the Iraqi economy suffers from a large gap between real GDP and potential GDP which means that there was waste of resources. The study used Vector Autoregression procedure; The main finding is that there is no coordinate between public expenditure and economic growth to satisfy the aims of the economic policy in Iraq. In addition, there is a negative casual relationship between economic growth and public expenditure while there is no a relationship between public expenditure and economic growth because the high percent of the public expenditure is operational expenditure and then the productive ability in Iraqi economy was ineffective which negatively impact upon GDP. As a result the rate of economic growth was unaffected variable by expenditure. The study suggested that it should be directed public expenditure in away to increase the productive capacity of the economy by creating structural change in agricultural, Industrial and Tourism sectors' to increase their contribution in GDP. And it should be coordination and connection between public expenditure and economic growth to achieve the aims of economic policy, by adopting financial policy develop real sector in Iraqi economy. المقدمة | ||
| Keywords | ||
| Department of Economics | ||
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