Answers are grounded in this paper and cite their sources.
Analysis shows issued currency positively affects economic growth in Iraq, suggesting monetary policy's vital role.
This research aims to analyze and measure the impact of currency issuance on the Gross Domestic Product (GDP) at current prices in Iraq, under the fluctuations of the parallel exchange rate during the period (2004–2024). The study is based on the hypothesis that monetary policy, represented by money issuance, directly and indirectly affects economic growth. However, this relationship may be influenced by structural variables and economic shocks that Iraq experienced throughout the study period. The research employs unit root tests with structural breaks to determine the stationarity and cointegration properties of the variables. The results indicate that GDP and the exchange rate are integrated of order one( I (1)), while the issued currency is stationary at the level. Relying on the regression approach with the inclusion of structural changes using the Indicator Saturation Methods (SIS), the findings reveal a positive and statistically significant relationship between issued currency and economic growth, reflecting the role of expansionary monetary policy in supporting economic activity. Conversely, the parallel exchange rate was found to have no significant direct effect on growth, due to the Central Bank’s intervention in stabilizing the dinar through the currency auction. The study concludes that issued currency represents the most influential variable on economic growth in Iraq, whereas the impact of exchange rate volatility remains limited, reflecting the rentier nature of the Iraqi economy and its near-total dependence on oil revenues.
No takes yet. Share an insight, caveat, or question.
Nsaif et al. (2025) studied this question.
Synapse has enriched 10 related papers. Consider them for comparative context: