Effectiveness of Financial Inclusion in Enhancing Monetary Stability in Iraq for the perid (2004-2017)

Abstract

This study deals with the basics of financial inclusion, monetary stability, explaining the extent of the effectiveness of financial inclusion in achieving monetary stability in Iraq, by analyzing variables of the study; measuring and economic. The descriptive analytical approach has been used in analyzing Financial Inclusion data in some economic variables, The stability indicator represented by the general level of consumer prices has been adopted as a dependent variable, and the indicators of financial inclusion represented by the number of banks, bank deposits and bank credit as independent variables, according to Dickey Fuller expanded tests (FDA) and Philips Byron (PP) shows that the degree of integration of the study variables is a mixture of type I (0) and type I (1), Thus, the self-regression model for the distributed slowdowns period which was estimated for Iraq, and according to the boundary test for joint integration, it was noticed that there is a relationship of joint integration, which means a long-term balance relationship between independent and dependent variables, This is confirmed by the existence of a causal relationship in two directions between the time deposits, the general level of consumer prices, and the error correction vector model was estimated and the error correction factor was identical to the terms in the model Iraqi , The model succeeded in all standard quality tests, and the most important results of the study are that (13%) of the imbalance in the short term will be corrected during a period of time of three months that a return to full balance will be within about two years, This is for the Iraq model.