The role of criticism in productivity of capital in the Iraqi economy 2004-2023

Abstract

      This study aims to analyze and measure the role of monetary policy in enhancing the average productivity of capital in the Iraqi economy during the period (2004-2023), in light of an economic environment characterized by renter features and great dependence on the crude oil sector. The study is based on the premise that the impact of monetary policy instruments on capital productivity varies depending on the type of instrument and prevailing economic conditions, and is not homogeneous over time or economic sectors. The research relied on the descriptive analytical method in the theoretical aspect, along with the use of the advanced standard method through the self-regression model of distributed time gaps (ARDL) to measure the short- and long-term relationship between the average capital productivity (with and without crude oil) and both the broad money supply (M2), , banking sector deposits, and the price of monetary policy. The study concluded that the average productivity of capital in the Iraqi economy witnessed a clear fluctuation during the research period, as a result of economic and security shocks and fluctuations in oil prices. The benchmark results also showed the limited effectiveness of monetary policy instruments in supporting capital productivity, , while the price of monetary policy has had the opposite effect in the short term, reflecting the weakness of monetary transition channels. The study concludes that it is necessary to strengthen coordination between monetary policy and investment policies, and direct financial resources towards non-oil sectors, in order to contribute to raising the efficiency of capital use and achieving more sustainable economic growth