The (Wavelet) Effect of Money Supply on the General Index of the Iraqi Stock Market

EasyChair Preprint no. 10991

Abstract

The study of the wavelet effect of the money supply on the general index of the Iraqi stock market aims to identify the possibility of the impact of monetary policy trends on the performance of the stock market, and to find out how the money supply affected the stock market in Iraq, where the frequency wavelet methodology was used. In order to determine the correlation between the money supply variable and the general stock market index, the wavelet or frequency methodology developed by Grinsted et al. was used. (2004) The methodology aims to reveal the common movement between the variables of the study, and the study concluded that the results drawn from the ripple effect is the presence of causality in one direction extending from the broad money supply index to the general index of the stock market with different frequencies and different periods between the time period 2004 -2020, where the majority of stocks indicate rising or continuing within the white cone-shaped line. We notice in the short term that the beginning of the period was direct, then inverse in 2008, and the reason is due to the global financial crisis at that time, and from the year 2010 to 2014, we notice that the arrows are directed to the right and to the top of the right, which indicates a higher positive relationship between the two variables, and the reason is due to the increase in the money supply. Which was caused by the increase in revenues resulting from the rise in oil prices. We notice that stocks moved to the left at the beginning of 2017, and the causal effect was stronger during the period from 2017 to 2019 compared to the period from 2004 to 2008. It is clear that the results reveal the extent of the importance of the broad money supply in Impact on the stock market.

Keyphrases: Wavelet, المؤشر العام لسوق الأوراق المالية, عرض النقد

@Booklet{EasyChair:10991,
  author = {Atiyah Mohammed and Fuoad Huseen and Uday Ibrahim},
  title = {The (Wavelet) Effect of Money Supply on the General Index of the Iraqi Stock Market},
  howpublished = {EasyChair Preprint no. 10991},

  year = {EasyChair, 2023}}