Measuring and Analyzing the Impact of Some Monetary Policy Instruments on Trade Exposure in Iraq for the Period (2003–2023)

Abstract

This research aims to analyze and measure the impact of some monetary policy tools on the degree of trade exposure in Iraq during the period (2003–2023), in light of the economic transformations and trade openness that the country witnessed after 2003. The study relied on a standard analytical approach using annual data on some economic variables. The autoregressive distributed lag (ARDL) method was employed to measure short- and long-term relationships and verify the direction of causality between variables. The study revealed several results, the most important of which is the existence of a significant relationship between some monetary policy instruments and trade exposure. Based on the research findings, the study suggested the need to coordinate monetary policy with trade and industrial policy to mitigate the risks associated with increased trade exposure and enhance the national economy's ability to confront external shocks by diversifying sources of income, supporting local production, and managing the exchange rate to serve economic stability.