Test the relationship between budget deficit and inflation rate In the Iraqi economy

Abstract

Abstract The study tries to find the relationship between budget deficit and inflation rate in the oil developing economy . This relationship disgust broad arguably among economists in recent times , and it have been in opposite directions. Supporters of theorem finance theory , which based on the arguments of Keynes, and called by traditional theorem . It see that budget deficit have inflationary effects , and upon moving causal it to the inflation rate. The other direction, the theorists of monetary theory , which is based on the arguments of Friedman ( modern theory ) and see that inflation is causing the budget deficit .It Uses data on Iraqi economy as a case study. By analysis using Granger causality and co - integration model for the period ( 1980-2011 )