ANALYSIS AND MEASUREMENT OF INTERNAL BALANCE POLICIES (IS-LM MODEL) AND ITS EFFECTIVENESS IN THE IRAQI ECONOMY BETWEEN (2004-2020)

Sakna Jahih Faraj

Researcher, Email: sakna.al_sary@uobasrah.edu.iq

Prof. Dr. Shaaban Saddam Al-Amarah

Supervisor, Assistant, College of Administration and Economics, University of Basrah

Abstract

Iraq faces a clear problem in its internal balances, which is reflected by economic activity with its various indicators. After 2003, macroeconomic policies were crystallized to address this problem through financial, monetary and trade policies, but it still suffers from this problem. Therefore, the research aims to study this problem, analyze and measure the impact that it has. The internal economic balance policies are performed by formulating a standard model using simultaneous equations to know the nature of the relationship between national income and internal balance variables. Thus, he can reduce inflationary pressures, by providing imported goods to create a balance between supply and demand for goods and products, so the relationship will be inverse between imports and national income because it represents an element of leakage from national income. Thus, imports are a remedy to confront the imbalance in the external balance model occurring in the Iraqi economy. There must be diversity in the Iraqi economy because it suffers from the stagnation of its production apparatus, as the commodity sector relied on the outside in a very large way.

Keywords: internal balance, investment, money supply and demand, unemployment, fixed exchange rates, fiscal policy.