Coordination between Monetary Policy and Fiscal Policy in Achieving Economic Stability in Iraq during the Period (2005–2024)
DOI:
https://doi.org/10.71207/ijas.v22i87.5877Keywords:
Monetary Policy, Fiscal Policy, Economic Stability, Output GapAbstract
This study aims to analyze the impact of coordination between monetary and fiscal policies on achieving economic stability in Iraq using the output gap as an aggregate indicator, based on the ARDL model. The results reveal a long-run equilibrium relationship, with bank credit and public expenditure playing a significant role in reducing the output gap, while inflation exerts a negative and statistically significant effect. In contrast, the interest rate shows a weak and statistically insignificant impact. Public revenues exhibit a positive but insignificant effect due to their reliance on oil revenues and their indirect transmission through public spending. The study concludes that achieving economic stability in Iraq requires strengthening institutional coordination between monetary and fiscal policies, managing liquidity and credit, controlling inflation, and improving the efficiency of public expenditure.
Downloads
References
1. بوعمرة, بن عبد الفتاح, & دحمان. (2019). أثر السياسات النقدية والمالية على النمو الاقتصادي في الدول العربية خلال الفترة (1995- 2016). ,التكامل الاقتصادي. 7(3), 19-31
2. د. عبدالسلام مسعود خليفة رحومه. (2022). أثر السياسة المالية والنقدية على النمو الاقتصادي. Aljameai, (36).
3. عبد الرزاق, بن عمرة, عبد العزيز, & مقراني. (2021). أثر السياسات النقدية والمالية على بعض مؤشرات التوازن الداخلي في الجزائر دراسة تحليلية قياسية خلال الفترة 1990-2018. مجلة البشائر الاقتصادية, 7(1), 94-113.
4. فيصل غازي بلباس، و اوس فخر الدين الجويجاتي. (2022). أثر السياسة النقدية والمالية في التاثير على الناتج المحلي الاجمالي في العراقخلال المدة (1990-2020). مجلة تكريت للعلوم الادارية والاقتصادية، Doi: www.doi.org/10.25130/tjaes.18.60.3.17 ، الصفحات 318-334 .
5. كمال كاظم الشمري، و ابتهال احمد عبد عون. (2018). تحليل التنسيق بين السياسة النقدية والسياسة المالية في ظل الدين الحكومي، العراق 2006-2026 انموذجا. المجلة العراقية للعلوم الادارية، المجلد 14، العدد 58.
6. Alexius, A., & Holmlund, B. (2008). Monetary policy and Swedish unemployment fluctuations (No. 2008: 5). Working Paper.
7. Arestis, P., & et.at. (2018). Keynesian macroeconomic policy: Theoretical analysis and empirical evidence. Panoeconomicus, 65(1), 1-20.
8. Attamah, N., et.at. (2015). The impact of fiscal and monetary policies on unemployment problem in Nigeria (managerial economic perspective). Risk governance & control: financial markets & institutions, 5(2), 101-109.
9. Chowdhury, A., & Hossain, A. (2003). Monetary and financial policies in developing countries: Growth and stabilization. Routledge.
10. Cingolani, M. (2008). Full employment as a possible objective for EU policy, I: A perspective from the point of view of the monetary circuit. Panoeconomicus, 55(1), 89-114.
11. Cobbinah, B. B., Wen, Y., & Sarpong, F. A. (2024). Navigating Ghana's economic waters: Exploring the impact of Fiscal and Monetary policies on stock market performance. Heliyon, 10(20).
12. Coccia, S., & Russo, A. (2025). Inflation, inequality and financial vulnerability: Monetary vs. fiscal policy in the face of an energy shock. Energy Economics, 143, 108222.
13. Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American statistical association, 74(366a), 427-431.
14. Gerrard, W. J., & Godfrey, L. G. (1998). Diagnostic checks for single‐equation error‐correction and autoregressive distributed lag models. The Manchester School, 66(2), 222-237.
15. Havemann, R., & Hollander, H. (2024). Fiscal policy in times of fiscal stress (or what to do when r> g). Journal of Policy Modeling, 46(5), 1020-1054.
16. Ille, S., Nguyen, D. T., & Carrera, E. J. S. (2025). On the stressful interaction of monetary and fiscal targets. International Review of Economics & Finance, 104, 104708.
17. Murad, E. I. H., & Bouabid, A. (2023). The Impact of Monetary Policy on Economic Stability in Light of the COVID-19 Pandemic in Oil-Producing Countries: the Case Of Iraq. International Journal of Professional Business Review: Int. J. Prof. Bus. Rev., 8(7), 50.
18. Musgrave, R. A., & Peacock, A. T. (Eds.). (1958). Classics in the theory of public finance. Springer.
19. NGUYEN, K. T., & et.at. (2024). The impacts of monetary and fiscal policies on economic growth in Vietnam. Montenegrin Journal of Economics, 20(4), 19-26.
20. Pervaiz, B., et.at. (2024). Empirical analysis of the effectiveness of fiscal and monetary policy tools in stabilizing economy: Evidence from Pakistan. Qlantic Journal of Social Sciences and Humanities, 5(4), 248-257.
21. PESARAN, M. H., & et.at. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326.
22. Sena, P. M., Asante, G. N., & Brafu-Insaidoo, W. G. (2021). Monetary policy and economic growth in Ghana: does financial development matter?. Cogent Economics & Finance, 9(1), 1966918.
23. Utouh, H. M., & Kitole, F. A. (2025). The impact of fiscal and monetary policy on economic growth and structural transformation in Tanzania. Cogent Economics & Finance, 13(1), 2499013.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Omar Mahmood Akawee, Harith Raheem Atiyah
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors retain the copyright of their papers without restrictions.
