Analysis of the impact of leakage and addition elements in the evolution of the consumption function in the Iraqi economy for the period (2004-2022)

A thesis submitted to the Council of the College of Administration and Economics – University of Karbala, which is part of the requirements for obtaining a master’s degree in economic sciences

Submitted by the student

Marwa Saad Jabr

Supervised by

Prof. Dr

Muhammad Hussein Kadhim Al-Jubouri

Abstract

The research aims to analyze the impact of leakage and addition elements gap on the evolution of the consumption function in the Iraqi economy for the period (2004-2022(.By understanding how  to transmit a gap effect of leakages-addition elements in the evolution of the consumption function in the Iraqi economy, and there is agreement among researchers on the importance of the gap representing the difference between leakages and  addition elements significantly in the development of the consumption function, which is considered the ultimate goal of economic activity. All activities aim to satisfy the needs of society, and leakages and addition elements include these activities that stimulate economic activity. The problem of the research is characterized by several questions, including the nature of the gap in the elements ,whether it affects the consumption function and whether the consumption function responds to this effect. The hypothesis of the research is that the gap in the leak-addition elements has an impact on the consumption function in the Iraqi economy, and this impact varies in the presence of oil revenues and in the absence of it. The researcher relied on using the inductive methods by surveying and analyzing the data of the Iraqi economy, as well as using statistical analysis to clarify this through the ARDL model to show the extent of the impact of the gap on the consumption function. The research has reached several conclusions, the most important of which is that the impact of leakages and addition on the evolution of the consumption function varies over time, influenced by economic changes. The research also indicates a positive relationship between income and consumption, meaning that an increase in income leads to an increase in consumption. The researcher recommends the necessity of determining the percentage of consumption expenditure from income towards investment instead of consumption, and taking the necessary measures to encourage investment for the development of all economic sectors. It is also important to promote the productive sector and reduce dependence on imports as this improves the local economy and reduces the gap.

Keywords: leakages, addition , consumption function.