The effect of the size of foreign debts on the monetary policy efficiency to fulfilling monetary stability (Iraq is a case study for the period from 2005-2018)

Abstract

Most of the developing countries resort to external debt to bridge the gap between their increasing expenditures and their limited financial resources, but there is a challenge facing these countries as the high rate of growth of this debt and its accumulation has put many of these countries in a great dilemma and is represented by the inability to sustain these debts. Iraq is one of the countries where debts are accumulated  due to the wars , political fluctuations and mismanagement of the economy, as the debt at the end of the study year reached (64.5) billion dollars. Our study came to measure the effect of the volume of external debt on the efficiency of monetary policy in Iraq through achieving monetary stability and targeting inflation rates for the period (2005- 2018) using the Augmented Dickey-Fuller test and the Cranger causality test , the appropriate standard models, in addition to Cranger's causation,.  We have  dealt in the first and second topics with the identification of external debt criteria for classification of external debt and then the historical development of Iraq's external debt.

In the third topic, we  have discussed  definition of monetary policy in general and the monetary policy of Iraq after 2003, and the most prominent tools that were followed to achieve monetary control and monetary stability in Iraq.