Academic journal article Journal of Economics and Economic Education Research

The Impact Tools of Financial Policy as Determined of Iraq's Economic Growth Rates for the Period (2003-2016)

Academic journal article Journal of Economics and Economic Education Research

The Impact Tools of Financial Policy as Determined of Iraq's Economic Growth Rates for the Period (2003-2016)

Article excerpt

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INTRODUCTION

The tools of financial policy are the most important activation economic tools that have a role in influencing the economic for any country, It also co-ordinates relations with other economic policies. According to the developed stages of economic schools by sequence as classical which its characterized of balancing the budget and Sustainability the balancing level, and then moved to the stage of intervention in the thought of the Keynesian school that the make fiscal policy transition from the neutrality to the direct influence in economic activity that caused stimulating demand through the increase government spending, and then the tools of fiscal policy have developed into the central planning stage in socialist thought as a result of the expansion of the role and functions of the state, lead the expansion of tools financial, which not covering public expenditures, but there are important financial instruments have a clear impact in economic activity such as redistribution of income and the achievement of social justice and others.

Financial policy is defined as the use of expenditure and government revenue to influence the of aggregate effective demand in accordance with the common economic situation to increase economic growth rates and redistribute income among individuals (Kneller et al., 1999), and can be defined as direct intervention by the financial authority to influence income and employment levels and GDP, through the using of fiscal policy means of public expenditure and public revenues (Fatás & Mihov, 2001) in order to increase public welfare and control of financial resources (Besley & Smart, 2007). The fiscal policy uses two main tools to achieve its general objectives, which are the tools of the other (public expenditure and revenues), the general revenues and expenditures are the main means of the state's fiscal policy (Hemming et al., 2002), the public expenditures and revenues relate to the quantities required to perform the state's financial function and to finance the requirements of economic activity and there is a third tool related to the technical organization of these financial quantities and called the general budget (Abu & Mohammad, 2006), Investment plays a big role in determining the rate of economic growth, as each increase in that expenditure represents the addition of new production capacity, the goal of the economic development plans is to achieving an increase in the national income more than the rate of population increase, hence known the importance of investment expenditure due considered it the axis of economic development (Aljanabi & Taher, 1990).

In related at the tools of fiscal policy in Iraq is no less than importance other countries as an effective tool in promoting economic growth rates through the management of the public budget and directing public spending to more effective sides, but the constraints and economic and political crises after 2003 prevented the achievement of the desired goals as well as The expansion of public spending on services and the requirements of such service and investment projects on the one hand, and on the other has directly affected the reality of fiscal policy, which led to a decline in economic growth rates as a result of local and regional political and economic changes And international, And therefore the failure of economic development programs and therefore ineffectiveness of financial policy tools, the protection of the country from the crises that may occur to it especially after the political and economic transformation may contribute to the achievement of economic growth and development, the tools of financial policy is prestigious for the programs Development of key indicators and findings effective solutions to the economic problems and imbalances of different sectors (Alsamaraey & Hana abdel, 2002).

LITERATURE REVEIWS

There are a many studies on the tools of policy financial, but its difference accordance to editors and visions as Saad's study under the title "Discretionary Fiscal Policy and Its Impact on Economic Growth in Jordan during the Period 1976-2011. …

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