دور اقتصاد الظل في النمو الاقتصادي

The role of the shadow economy in economic growth

Abstract

In view of what the Iraqi economy raised during the period (1995-2019), of
international economic sanctions and political, economic and social
transformations and the accompanying tremendous development in various
fields, openness across borders and the transition to market economies, and the
spread of financial and administrative corruption and the profits achieved by the
beneficiaries, was the emergence and growth of The shadow economy
represented by its illegal activities is a way to legitimize these funds, and this has
caused severe difficulties for economic and security policy makers as it
undermines the reliability of official statistics and this is what constitutes an
obstacle to achieving economic growth.
The research stems from the hypothesis that, is economic growth in Iraq
negatively and positively affected by changes that occur in the activities of the
illegal shadow economy (money laundering, tax evasion, abnormal demand for
money, corruption) and what is the percentage of these effects in the short and
long term in the country.
To achieve the objectives of the research and to test its hypothesis, the research
relied on a mixture between the use of the analytical method, which is based on
the inductive and deductive method within the framework of economic theories
and analysis of data development and evaluation of economic phenomena by
extrapolating the economic reality during the research period, and the
quantitative approach based on econometrics using ( Autoregressive Distributed
Deceleration (ARDL) model to measure and analyze the role of the shadow
economy in economic growth in Iraq for the period (1995-2019), which is based
on induction testing, limits testing, diagnostic tests, and the most important
conclusions reached by the researcher for changes in interest rates, which play
an important role in influencing investment and decisions economy in the
country, The high demand for abnormal money to meet the requirements of the
shadow economy, which is inflexible towards interest rate changes, and thus
monetary policy has no effect on liquid money in circulation, and accordingly it
is affected by workers in the shadow economy, which will be reflected in raising
the interest rate to achieve profits.
Keywords, shadow economy, abnormal demand for money, money
laundering, economic growth