Analyze the effect of some fiscal policy variables on changing unemployment rates for the duration 1990 - 2016 (Iraq case study)

Abstract

Unemployment is a macroeconomic problem that needs a range of solutions to address it. opinions differed on this problem, some of them did not believe in the existence of this problem(the classic school). The free market is worth solving this problem. The Keynesian school acknowledged the existence of this problem in economics. Government intervention deserves to be resolved through effective demand policy. This led the United States and the major industrialized countries to intervene in the economic life since the Great Depression of the 1930s to enhance the general economic activity and achieve stability, because of the development that has taken place in societies, there are many types of the problem of unemployment, which prompted economic policies to address them in many ways, For example, in the early nineties of the last century Egypt entered into a package of economic and financial policies after the implementation of the economic reform program, which was to liberalize the exchange rate of the pound and increase tax revenues and rationalize public spending, following austerity fiscal policy, which resulted in a decline in the growth rates of public expenditure and the proportion of GDP, As far as the methods of tackling unemployment through fiscal policy and instruments are concerned, they have had modest contributions, especially in developing countries, including Iraq, due to the political conditions that have clearly reflected on the economic situation, Unemployment rates have risen, especially after 2003, making the Iraqi government begin to develop remedies to alleviate this problem and try to use the tools of fiscal policy such as taxes and public spending to mobilize aggregate demand and attract the largest possible number of labor, Despite these methods to address the problem of unemployment, but these methods are still weak impact, which requires effective coordination between the fiscal and monetary policy to reduce unemployment