Measuring and analyzing the change in the components of aggregate demand and its impact on the gross domestic product in Iraq.

Abstract

The focus of the study and analysis was on the demand side by studying the gross domestic product through the components of aggregate demand in which the gross domestic product is studied and analyzed (by spending method).  And that the main problem of the research is concentrated on the weakness of the ability of the components of aggregate demand to contribute to achieving output growth due to internal and external factors, as well as political and security factors.  In addition to the foregoing, the inability of the Iraqi economy to address the structural imbalances of the gross domestic product through the rentier economy, which depends on oil revenues, which affects the economic development and growth processes.  The research also assumes the existence of a long-term equilibrium relationship between the components of aggregate demand (aggregate spending) and GDP, based on the importance of knowing the impact of economic variables (consumption, investment, government spending, exports and imports) on the structure of GDP and its impact on achieving growth rates in the economy.  Iraqi.  The research also deals with measuring the relationship between the components of aggregate demand and GDP for the period (2000-2021), and the Iraqi economy is a spatial case study, by measuring the impact of each variable of aggregate demand on the gross domestic product in Iraq, whether it is short-term or long-term effects,  In addition, knowledge of the dynamic effects and the long-term co-integration relationship between them using the advanced standard analysis method (ARDL).

   It was concluded that economic instability or balance occurs as a result of fluctuations in total spending that occur suddenly, so the effective management of the two forms of consumer and investment spending will mitigate the cyclical fluctuations in economic activity in the short term, and it can control the level around which the permissible fluctuations occur in  economic activity in the long run.  It also showed the weakness of the effect of the components of aggregate demand, except for private consumption spending, on revitalizing and diversifying the economy on the other hand.  (effective aggregate demand).  As a result of the foregoing, any real treatment of the structural imbalance in the Iraqi economy requires the development of an economic policy according to scientific foundations and economic modeling.