The Effect of Oil Revenue Volatility on the Real Exchange Rate: an Analysis of Dutch Disease in Iraq

EasyChair Preprint 14847

Abstract

This study explores the impact of oil revenue volatility on the real exchange rate in Iraq, with a focus on the phenomenon commonly known as Dutch Disease. Using a comprehensive dataset spanning the last two decades, we analyze how fluctuations in oil revenue affect the real exchange rate and broader economic stability. Employing econometric models to account for both short-term and long-term effects, our findings indicate a significant relationship between oil revenue volatility and real exchange rate appreciation. The study also examines the implications for Iraq’s non-oil sectors, highlighting how Dutch Disease exacerbates economic imbalances and hinders sustainable growth. By providing insights into the dynamics of oil dependence, this research offers policy recommendations aimed at mitigating the adverse effects of revenue volatility and promoting economic diversification in oil-dependent economies.

Keyphrases: Dutch disease, Exchange Rate Appreciation, Iraq, Oil Revenue Volatility, Oil-Dependent Economies, Real exchange rate, economic stability

@booklet{EasyChair:14847,
  author    = {Anthony Collins},
  title     = {The Effect of Oil Revenue Volatility on the Real Exchange Rate: an Analysis of Dutch Disease in Iraq},
  howpublished = {EasyChair Preprint 14847},
  year      = {EasyChair, 2024}}