The Impact of Fiscal Policy on Unemployment: An Econometric Study in Iraq for the Period (2005-2021)

Abstract

This paper investigates the impact of fiscal policy on unemployment in Iraq. The study uses data from the period 2005-2021. The study finds that fiscal policy has a significant impact on unemployment in Iraq. An increase in government spending leads to a decrease in unemployment. This is consistent with the theoretical expectation that government spending creates jobs and increases economic activity (Habeeb, 2005).

The study also finds that the impact of fiscal policy on unemployment is stronger during periods of economic recession. This is likely because government spending is more effective at stimulating the economy during times of economic weakness (Hammad et al., 2023).

The study's findings have important policy implications for Iraq. The government can use fiscal policy to help reduce unemployment, especially during periods of economic recession. The government can do this by increasing government spending on infrastructure, education, and other programs that create jobs.

The findings of this study are also relevant to other countries with high unemployment rates. Governments in these countries can use fiscal policy to help reduce unemployment by increasing government spending.