The impact of trade balance shocks on international monetary reserves – experiences of selected countries with reference to Iraq

A master’s thesis submitted to the Board of Directors and Economics – University of Karbala as part of the requirements for obtaining a master’s degree in economic sciences

Submitted by student

Fawzia Abdel Zaid Karim Al-Hasnawi

Supervised by

Prof. Dr. Munadil Abbas Hussein Al-Jawari

Abstract:

balance shocks (T.B) and their impact on international cash reserves (Cr) and to stand on the reality of foreign trade and its commodity trends and cash reserve components in the selected sample countries China, the United Kingdom and The research aims at standard modeling to study the relationship between trade (Iraq). The research also focuses on the importance of the role practiced by foreign trade such as exports of goods and services in increasing cash reserves in light of the financial leakages caused by the increase in imports, and the research seeks to achieve a number of goals, including the study of analyzing the reality of the trade balance in the sample countries (China, the United Kingdom, Iraq) for the period 2004-2020 and stating the role of Each of the exports, which is considered the element of pumping foreign exchange, in which goods and services constitute the greatest importance in it and a source of revenue against imports, which represent (the element of leakage of foreign exchange, and then the impact of that on the cash reserve. The research reached a number of conclusions, the most important of which is that there is a positive and soft relationship between exports ( Ex) and monetary reserves (Cr) in China, as the value of the marginal tendency of the relationship estimated by adopting the ARDL methodology was (1.73) and in the long term (1.54) and the short term (1.73) as well as a positive and direct relationship between exports and monetary reserves in the United Kingdom, as the value of the marginal parameter Using ARDL (0.39) and in the long term (0.12) while in the short term (0.39) as well. As for Iraq, the research concluded that imports have a negative relationship in cash reserves, as the value of the marginal slope (using the ARDL methodology) reached (0.16), and the same in The short term and (0.44) in the long term. The research also focused on a set of recommendations, the most important of which is working to expand the production base, which contributes to diversifying the countries’ exports and thus increasing reserves and facing unexpected crises and shocks.

The impact of trade balance shocks on international monetary reserves – experiences of selected countries with reference to Iraq

A master’s thesis submitted to the Board of Directors and Economics – University of Karbala as part of the requirements for obtaining a master’s degree in economic sciences

Submitted by student

Fawzia Abdel Zaid Karim Al-Hasnawi

Supervised by

Prof. Dr. Munadil Abbas Hussein Al-Jawari

Abstract:

balance shocks (T.B) and their impact on international cash reserves (Cr) and to stand on the reality of foreign trade and its commodity trends and cash reserve components in the selected sample countries China, the United Kingdom and The research aims at standard modeling to study the relationship between trade (Iraq). The research also focuses on the importance of the role practiced by foreign trade such as exports of goods and services in increasing cash reserves in light of the financial leakages caused by the increase in imports, and the research seeks to achieve a number of goals, including the study of analyzing the reality of the trade balance in the sample countries (China, the United Kingdom, Iraq) for the period 2004-2020 and stating the role of Each of the exports, which is considered the element of pumping foreign exchange, in which goods and services constitute the greatest importance in it and a source of revenue against imports, which represent (the element of leakage of foreign exchange, and then the impact of that on the cash reserve. The research reached a number of conclusions, the most important of which is that there is a positive and soft relationship between exports ( Ex) and monetary reserves (Cr) in China, as the value of the marginal tendency of the relationship estimated by adopting the ARDL methodology was (1.73) and in the long term (1.54) and the short term (1.73) as well as a positive and direct relationship between exports and monetary reserves in the United Kingdom, as the value of the marginal parameter Using ARDL (0.39) and in the long term (0.12) while in the short term (0.39) as well. As for Iraq, the research concluded that imports have a negative relationship in cash reserves, as the value of the marginal slope (using the ARDL methodology) reached (0.16), and the same in The short term and (0.44) in the long term. The research also focused on a set of recommendations, the most important of which is working to expand the production base, which contributes to diversifying the countries’ exports and thus increasing reserves and facing unexpected crises and shocks.