Effect of energy revenues on monetary policy variables in Iraq
A record study 2000-2020
Thesis submitted to the Board of the College of Administration and Economics / University of Kerbala, which is part of the requirements for obtaining a master’s degree in financial and banking sciences
By
Ali saeed Noor AL- Talkani
Supervisor by
Dr. Hashem Jabbar AL-Husseini
Abstract
Iraq is a classic example of the contradiction between the abundance of natural resources and the distortion of the results of economic development and the development of the financial and monetary structure, and despite the fact that Iraq is the fifth in the world in crude oil reserves, at a rate of 11.3%, and the fourth in the Arab world with reserves of natural gas, which represents 1.9 of the world’s proven reserves, in addition to that Iraq is the second largest crude oil producer in the Organization of Petroleum Exporting Countries (OAPEC), with 14.21% of the reserves of the exporting countries, in the midst of all this abundance of natural energy resources, but the economic policies concerned with the energy file in Iraq have largely failed to improve To the level of expectations and ambitions, and it is still based on the unilateral economic system without developing or investing the returns from the energy sectors to serve the public interest. Global price changes in energy markets. Out of the great importance that the Iraqi energy sector enjoys, the study aimed to know the impact of energy revenue shocks on the monetary policy variables of Iraq, by measuring the correlation and impact between Iraqi energy revenues represented by the independent variables of the study (oil and gas), and monetary policy variables. And represented by the dependent variables, which include money supply in terms of the first and second concepts, inflation and exchange rates in the parallel market, then interest rates on deposits for a period of six months and interest rates on savings deposits for banks operating in Iraq, depending on the data of the study, which includes (17) years for crude oil revenues, and (36) months for natural gas revenues, by using a set of standard analyzes by means of statistical programs (SPSS20) and (EXCEL), as well as using the special software language (MATLAB), in light of which the researcher was able to design a special software language to measure the impact of energy returns In its general sense, any of the economic variables that the researcher wishes to study, such as monetary, financial and economic. The study reached a set of results, the most important of which is (there is a strong direct correlation and impact between Iraqi oil revenues and money supply in the narrow sense and the broad sense), which is consistent with the logic of economic theory in rentier countries, where the statistical results indicate that the hypotheses had a statistical significance when The level of morale used (5%). The study also found a strong inverse relationship between natural gas revenues and money supply in the concept of narrow and broad, which is contrary to the directions of economic theory, which indicates a defect in the wrong energy policy pursued by the state in managing the natural gas file, and this is what makes it conflicting and contradictory. With revenues from the export of natural gas. The study recommended the necessity of following a solid economic and administrative energy policy that would modify the problems occurring in the Iraqi energy sector in general and the natural gas sector in particular, considering it an important second outlet, diversifying the source of income for Iraqi revenues.
Key terms: energy yields, money supply, inflation, exchange rates, interest rates.
