Overview

Original Research

THE EXCHANGE RATE AND ITS IMPACT ON IRAQI ECONOMIC GROWTH USING THE (ARDL) MODEL

MOHAMMED ABDULLAH SALEH 1, MAHDI MNASRI 2, and NIAZI KAMMOUN 3.

Vol 18, No 08 ( 2023 )   |  DOI: 10.5281/zenodo.8300727   |   Author Affiliation: Department of Economics, Faculty of Economics and Management of Sfax (FSEGS), University of Sfax, Tunisia 1,2; Full Professor, The Institute of Advanced Business Studies (University of Sfax), Tunisia 3.   |   Licensing: CC 4.0   |   Pg no: 1272-1287   |   Published on: 29-08-2023

Abstract

This article examines the relationship between exchange rates and Iraqi economic growth between 1990 and 2018, analyzing both short- and long-term effects. Using the Autoregressive Distributed Lag (ARDL) method developed by Pesaran et al. (2001) and the results of Toda Yamamoto's (1995) causality tests show that there is a long-term co-integrating relationship between the exchange rate and economic growth. This suggests that the two variables are linked in a sustainable way over the long term. However, the short-term effects are less pronounced, meaning that immediate variations in the exchange rate have a limited impact on economic growth. Furthermore, the causality test shows an indirect relationship between the exchange rate and economic growth, highlighting the existence of intermediate factors affecting this relationship.

Keywords

Exchange Rate, Gross Domestic Product, Inflation, Budget Balance, Unemployment, Trade Openness, ARDL, Iraq