Impact of Oil Price Fluctuations on Human Development: A Standard Study of Iraq

Munaf Marza*, Sundus Jasim Shaaibith and Shatha Salem Daly
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Munaf Marza*: Department of Economics, Faculty of Management and Economics/ University of Al-Qadisiyah, Iraq
Sundus Jasim Shaaibith: Department of Economics, Faculty of Management and Economics/ University of Al-Qadisiyah, Iraq
Shatha Salem Daly: Department of Economics, Faculty of Management and Economics/ University of Al-Qadisiyah, Iraq

The Journal of Social Sciences Research, 2018, 396-399 Special Issue: 5

Abstract: This paper examines the impact of oil price fluctuations on Human development in Iraq. We employed UNDP statistical data in HDI and oil prices were obtained from OPEC official statistics. EGARCH model is applied to estimate the series of oil price fluctuation. Further, we applied ARDL bound test approach to estimate the long run relationship between HDI and oil price fluctuation. Evidence shows that there is a long run relationship among the variables under study. A significant impact on human development index is witness due to fluctuations in oil prices. Since the dependence of Iraqi economy on oil exports tightly align the government spending with oil revenues. Therefore, this study proposes that Government should adopt a diversified policy and invest in other sectors of the economy, such as the industrial sectors. Investment in these sectors will help to increase the output of exportable goods. Exports of these goods can earn more foreign exchange. This will reduce the heavy reliance on oil revenues. The government needs to spend more money to provide infrastructure like transport facilities and stable electricity supply. This will help encourage private companies to invest more in their economic resources by reducing the cost of doing business.

Keywords: Human development; Oil price fluctuations; Iraq; ARDL; EGARCH. (search for similar items in EconPapers)
Date: 2018
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