Document Type : بحث

Authors

• Esam Saadon
• Basiem Khamees

Abstract

The study of public debt in a rentier economy that is closely linked to a highly volatile foreign market is considered one of the sensitive studies, as it puts before researchers the financial constraints that will be shackled by a weak economy with little diversification that depends on the energy market, which loses the state of financial sustainability and the state loses the ability to fulfill its financial obligations. The public debt must be at a rate not exceeding 60% of the gross domestic product according to the Maastricht Agreement of the Council of the European Union of the European Monetary Union. However, the public debt in a rentier economy may be a safe percentage according to the agreements. It is outside the capabilities of the state to sustain the debt while maintaining commitments. The state’s finances are within the limits of the fluctuating financial revenues due to its association with the oil market revenues, which are highly vulnerable to political events before economic events. It is very evident that any financial behavior of the state, as it is a heavy foot in the economy, must leave side effects on monetary variables, the most prominent of which is the speed of money circulation through the price channel. Interest and investment as a result of the state's competition with the private sector on limited financial resources, so we will learn about this relationship in the context of our research

Keywords

• Public debt
• velocity of money circulation
• cointegration
• autoregressive of the slowest distributed