ABSTRACT
This chapter argues that during the period under investigation the increase in export revenues, particularly revenues for oil exports, has been the fundamental factor behind the development of the indigenous economy, and the increased economic growth which characterised Iraq’s economy during the period of 1968–1980. The model was to be used to study both the effects of export fluctuation on the Iraqi economy as well as the manner in which discretionary policy measures may be taken to mitigate the effects of export fluctuations. The output of the manufacturing sector is strongly influenced by domestic demand and exports. The export sector simulation demonstrated the pervasive influence of the export sector on the rest of the economy. It was shown that a sustained decline in export prices exerted a greater negative effect than a sustained increase in export prices exerted a positive effect, even when the magnitude of change in either direction was identical.
