Measurement and Analysis of the Effect of Some Macroeconomic Variables on Public Spending in Iraq for the Period of (1991-2010)

Abstract

This study aims to measure the impact of changes in public revenues, GDP,and money supply on public spending. The descriptive approach and econometricsapproach were used in building the model based on the E-Views program in theanalysis and in light of the available data from the Central Bank of Iraq and theMinistry of Finance for the period 1991-2010, using the multiple linear regressionequation and the method of least squares OLS, it was estimated and the resultsshowed that there is a very weak effect on the gross domestic product, and themoney supply according to the slope parameter of both of them, which respectivelyamount to (0.0004-0.0453), while public revenues had a greater effect than themAs indicated by the slope parameter (0.6572) The simple linear regression equationwas used to identify the nature of the relationship between public revenues andpublic spending for the period under study, and by conducting statistical tests, itwas found that there is a long-term equilibrium relationship for the two variables,as indicated by the joint integration test, and that the causal relationship betweenthe two variables is bidirectional, as indicated by the test results. The study alsorecommended the need to work on diversifying the production base, as well assearching for stable and stable sources of financing for public spending to get rid ofthe state of being affected by fluctuations in oil prices and quantities as the mostimportant source of financing the general budget.