Estimating the relationship between the output gap and inflation in Iraq for the period 1989-2018

Abstract

The research presents how to estimate the relationship between the output gap and inflation in the Iraqi economy, by estimating the output gap using the Hodrick- Prescott filter on GDP data in Iraq for the period 1989-2018 and finding the changes in the output gap as a result of changes in GDP as a result of conditions Numerous, then review the data on inflation rates in Iraq for the same period and note the major developments that accompanied the change in the rate of inflation, and then find the relationship between the output gap as an independent variable that affects the rate of inflation as a variable dependent on changes in the total output. The relationship between the variables was estimated using the self-regression model of the slowed distributed time slots (ARDL), and the form of the relationship between the variables was reached where there is a long-term balance relationship between the changes that occur in the output gap and its effect on inflation rates.