AN ANALYTICAL STUDY OF THE EFFECTIVENESS OF FISCAL POLICY TOOLS IN ACHIEVING ECONOMIC STABILITY IN IRAQ

Abstract

The majority of countries throughout the world struggle with the issue of economic stability. Financial policy measures may occasionally fall short of achieving the requisite level of economic stability. Therefore, the current research aims to know the impact of fiscal policy tools to attain financial stability and any of these tools that have the most significant impact in achieving the goal of economic stability, to reduce an effort made by officials to establish the fiscal situation in to achieve the best outcomes and so that they can develop specific aspirations that have the most considerable influence on the stability of the Iraqi financial system. For this study, data has been compiled from the World Bank (2022) database, which covers the variables of economic growth and fiscal policy, such as the gross domestic product of Iraq, financial policy instrument track, monetary policy tools, and impacts on Iraq (the effect of public expenditures on economic stability, impact of public revenues on economic stability, and the effect of the general budget on financial stability) were considered variables. The analysis of the study has presented the significance of economic stability and the favorable or unfavorable impacts it has on the economy. Given the oscillations and fluctuations that occur in the financial policy tools, it is determined from the research that fiscal policy has a limited impact on achieving the goal of economic stability for Iraq. However, compared to other fiscal policy tools, public spending has the most significant implications for monetary stability.