DOI: 10.14704/nq.2022.20.8.NQ44562

Measuring the Effect of Government Borrowing Crowding Out of Private Credit in Iraq Using the ARDL Model

Ayar Salim Khammas, Dr. Nabil Mahdi Al-Janabi

Abstract

The research aims at testing the hypothesis of the monetarists, i.e. the hypothesis of internal government borrowing crowding out of private credit in Iraq for the period of 2010-2021. The ARDL model and the limits test for co-integration were used. The results were not in favor of the crowding out hypothesis as the value of the internal government borrowing parameter was less than zero with a longterm and short-term relationship between the two variables.

Keywords

internal government borrowing, private credit, the hypothesis of the monetarists, Iraqi economy

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