THE IMPACT OF MONEY SUPPLY ON INFLATION IN IRAQ FOR THE PERIOD (2007-2022)

Abstract

The importance of the research comes from the role of the money supply in the national economy, and it is one of the monetary policy tools that the central bank uses to finance economic activities, as it contributes to achieving economic growth, gaining full employment, and achieving stability. The research aims to identify the money supply and inflation as a theoretical concept. On the components and forms of inflation and analyzing the effect of the money supply on inflation according to economic theory. The research is based on the hypothesis that there is a direct relationship and influence between the money supply and inflation, which positively affects the national economy's growth rates. The research relied on the inductive approach and the general descriptive-analytical method. The money supply was an independent variable, and inflation was a dependent variable. The relationship between the money supply and inflation is a direct relationship according to monetary macroeconomic analysis, and every increase in the money supply leads to a rise in the general level of prices and the occurrence of inflation. If the central bank prints new currencies, this leads to an increase in the means of payment in circulation, increasing costs and creating inflationary pressures. The researcher recommends following the central bank's policy to absorb money from the public to reduce inflation.