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An Applied Study of the Symmetric and Asymmetric Impact of Oil Prices and International Financial Markets on Economic Growth in Iraq

Author

Listed:
  • Moustfa Ismael Khaleel

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

  • Ahmed Younis Jabbar

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

  • Maha Kalai

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

  • Rima Aloulou

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

  • Kamel Helali

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

Abstract

Iraq, one of the main oil exporting nations, is extremely susceptible to changes in the price of oil. This article attempts to investigate how the price of oil affects the way the Iraqi economy performs, as indicated by a number of factors (economic growth and international financial markets). We will apply econometric techniques in both linear and non-linear frameworks to accomplish this goal. To represent NARDL non-linearities in the relationship between the aforementioned economic variables, we will first look for linear cointegrating correlations and/or estimate ARDL models. If necessary, we will next use threshold cointegration. Thus, we demonstrate that, independent of the regime we are in, the asymmetry associated with the shock's sign is confirmed over the span January 2006–December 2020. Regarding the asymmetry associated with the shock's magnitude, it is only confirmed under the "below oil price threshold regime." In the "above oil price threshold regime," yields respond in a way that is proportionate to the shock's magnitude. Additionally, we demonstrate that the asymmetry associated with the shock's sign is confirmed during times of negative industrial output growth, while the influence of shocks looks symmetrical during times of positive industrial production variation.

Suggested Citation

  • Moustfa Ismael Khaleel & Ahmed Younis Jabbar & Maha Kalai & Rima Aloulou & Kamel Helali, 2024. "An Applied Study of the Symmetric and Asymmetric Impact of Oil Prices and International Financial Markets on Economic Growth in Iraq," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 66-80, July.
    • Handle: RePEc:eco:journ2:2024-04-7
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    More about this item

    Keywords

    Oil Prices; Economic Growth; International Financial Markets; Autoregressive Distributed Lag; Nonlinear Autoregressive Distributed Lag; Iraq;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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