Abstract:

     The study aims at showing the mechanism of the FAVAR model to demonstrate the importance of monetary policy instruments in macroeconomic variables which reflect the indicators of the efficiency of the monetary policy presented by the model as indicators to measure the health of the macro economy and the extent of the impact of the monetary power tools which varies from one country to another depending on the degree of economic and political development. The banking and financial sector, which represents an area for the implementation and activation of quantitative monetary policy tools, which have an important role as a channel for the transfer of monetary power to the economy and the formulation and implementation of monetary policy, which is linked to the extent of freedom of the Central Bank to use (The effect of monetary policy in some macro-economic variables using the FAVAR model) in order to study the relations between quantitative monetary policy tools (the re-discount rate) , Reserve requirements, open market operations) and performance indicators for US and Indian monetary policy with reference to Iraq for the period 1990-2017.

The importance of the study is reflected in the presentation of economic views on the course of monetary policy and the reflection of tools in the economy by the transfer of shocks of monetary policy to the economy through the indicators of efficiency, which are linked to the formulation and implementation of monetary policy, where monetary policy is one of the most important economic policies more effective in achieving economic growth than The study aimed at identifying the efficiency of monetary policy in the countries of the study sample, analyzing the tools of monetary authority and indicators of the efficiency of the performance of the policy. And the definition of the macro-economic variables included in the FAVAR model, which expresses the short and long term monetary policy performance indicators that reflect the effectiveness of monetary policy through the performance indicators, and the estimation and measurement of the correlation between the monetary instruments and their efficiency indicators for the period 1990 – 2017 and an analysis of the direction of the causal relationship between the instruments of monetary authority and the indicators of the efficiency of monetary policy.