Analysis Of The Impact Of public Spending On GDP - An Econometric Study Of The Case Of Iraq For The Period (1980-2021(

Abstract

The research focused on studying the type of relationship between public spending and gross domestic product in Iraq for the period (1980-2021), and trying to know its trends and determinants. The research started from the hypothesis that output is a function of public spending. In order to test this hypothesis, the descriptive method was adopted, which is based on the inductive approach. The standard “ARDL” model was also used for the purpose of measuring the researched relationship quantitatively. Among the challenges the researcher faced was the difficulty of obtaining data, especially those that coincided with Iraq's exceptional circumstances. The most prominent conclusions were that the domestic product does not necessarily have to be a function of public spending, but rather there are a number of factors that influence determining the type of this relationship. It was also shown that increasing the current output by one unit leads to its contraction after three years by an amount of (-0.279). It was also shown that the nature of the impact of public spending on output depends to a large extent on its efficiency. In the long run, it appeared that the increase in current spending in Iraq has a positive moral effect on output, while the change in investment spending has no moral effect on it