ABSTRACT
This chapter examines the structure of the macro model of the Iraqi economy and discusses the specification and estimation issues of the individual equation constituting the model and describes the structure of aggregate demand of the economy. The interest in policy analysis has grown mainly due to the increasingly large role assumed by the public sector in its pursuit of the new economic policy. Many research efforts have been devoted to the specification and for estimation either in part or complete of macroeconomics models in both developing and developed countries. In Iraq, there have been some attempts to specify and estimate an adequate structural model for the economy. The manufacturing sector has been the fastest growing sector in the Iraqi economy. The level of disaggregation is aimed at reflecting both the structure of the economy and the optimal use of the available information.
