Compatibility between government spending and broad money supply in Iraq's GDP growth for the period (2004-2020)

Abstract

The study dealt with the compatibility between government spending and broad money supply in the growth GDP, and it aimed to show the impact of three independent variables (current spending CS, investment spending Is, broad money supply Ms2) on the dependent variable (GDP), for the period (2020 -2004), the standard model was estimated according to the ARDL method, and according to the boundary test of join integration, it was found that there is a relationship of join integration of the estimated model. and the most important results of the study were that current spending and broad money supply have a positive impact on the growth of GDP at prices. However, this increase in GDP growth did not come as a result of diversifying revenues across the productive sectors of GDP, and that the concurrence of the short-term objectives of government spending and broad money supply did not create a solid ground for investment and a real increase in gross domestic product. At current prices, but rather a it led to an increase in domestic aggregate demand, which was met through imports as a result of the lack of a flexible production apparatus, which caused the phenomenon of stagflation.