The Interactive Relationship Between Monetary Policy and Inflation in the Iraqi Economy during the Period (2004–2023)

The research dealt with measuring and analyzing the mutual impact between monetary policy indicators represented by (broad money supply and interest rate) and the inflation rate in the Iraqi economy for the period 2004-2023, as the standard results in the research were estimated and analyzed using the vector error correction model (VECM), in order to estimate the long- and short-term equilibrium and causal relationship, and the most important thing that the research reached is the existence of a long-term causal equilibrium relationship between the research variables because the error correction parameter is negative and reached (-0.403447) and is statistically significant according to the t-test, and that the correction of the imbalance is done within 0.403 of time, which means the possibility of explaining and correcting about 403% of the imbalances or short-term deviations in the shocks on the inflation rate index in the previous year to the current year, and the heterogeneity test confirmed that the value of the chi-square in this research reached Chi-square = 129.1870 and the corresponding probability value reached 0.0879 which is greater than 5% and therefore we accept the null hypothesis that the residuals are homogeneous. The estimated diagnostic tests indicated that the model is free of all standard problems and that the variables under study are stable at the first difference due to their instability at the original level, which indicates that they are integrated to the first degree You can focus in this research on how digitization and technology affect data analysis and the application of monetary policies, as well as the role of digitization in improving the effectiveness of monetary policy and predicting inflation. Thus, digitization helps in collecting and analyzing huge amounts of economic data that affect monetary policy and inflation.