Impact of oil revenues on economic growth: An emprical study on the Iraqi economy

Oil is an unrenewable energy source and an important raw material for human life. Because oil is used in electricity, power, heating, industry and transportation. Some advantageous countries possess this large commercial value in terms of geographical location. Oil revenues are the source of economic growth in countries whose foreign income is based on oil exports. Fluctuations in oil revenues also affect economic growth. In this study, the effect of Iraq's crude oil revenues on economic growth is analyzed empirically. Data sets belonging to the years 1990-2018 were used in the study. The variables used in the study are real crude oil export revenues and real gross domestic product representing growth. Cointegration test was performed first, but cointegration between variables was not detected. Then Granger causality analysis was performed. As a result of the analysis, the causality relationship from real oil export revenues to real gross domestic product was found. Then, with the help of analysis of variance decomposition and impulse response functions, the dimensions of the relationship between variables were determined. At the end of the study, some concrete policy recommendations are given. Keywords: Oil, oil revenues, economic growth, granger causality