Impact of economic shocks in some macroeconomic variables in Iraq for the period (1980-2011)

A Thesis Submitted By

Khudhair A. Hussein AL- Waely

To The Council of Management and Economic College

 University of Karbala

As Partial Fulfillment of the Requirements For The

Degree of Master of Science in Economics

Supervisor By

Asst. Prof. Dr. Mahdi S. Gailan Al-Jebouri

       Iraq’s economy one of the economies possess great wealth, especially oil and gas, this has made the Iraqi economy, an economy yield based on the output of the oil sector with the shortcomings in the output of other sectors and this reflects the large imbalance in the structure of GDP and this which makes it vulnerable to external shocks of oil price shocks, as well as disruption of the structure of the general budget, as the public spending depends largely on the size of the oil revenues in hard currency in the case of decline in these revenues, the state will resort to increasing the public debt, as happened in the duration of the first Gulf War, or you resort to release new cash in a period of economic sanctions.

     And this study begins from the premise that this study starts from the premise that the impact of external economic shocks of oil price shocks on macroeconomic variables used to be the biggest shock of the impact of domestic economic shocks of monetary and fiscal policy.

     In order to verify this hypothesis, the structure of the study was divided into three chapters, addressing first the theoretical framework of economic shocks and economic stability and take the second analysis of the economic variables of the Iraqi economy and the third dealt with the measurement of impact of economic shocks in the Iraqi economy and present the results of the standard models used in this study and of Vector  autoregression estimate VAR, which depends on Stability testing of time series and cointegration test to determine if there was a relationship between long-term static variables and then estimate the model VAR. Moreover, the use of impulse response functions IRF and variance components analysis, as it measures the impact of shocks to the system in both the short and long term and this is one of the standard methods of modern methods in this area.