Multivariate Time Series Analysis Using Autoregressive Vector Model

Inflation, with its abnormal rates, is one of the most obvious negative economic phenomena affecting most economies worldwide due to its effects on various economic, social, and other spheres. Thus, the purpose of this study is to examine the relationship between Iraqi inflation rates and oil prices for the period from December 2010 to January 2024 using the autoregressive vector model, a multivariate time series model that considers the interaction between variables and treats all study variables as end-variables. Based on shock analysis and causality testing, the results demonstrated a unidirectional causal relationship between oil prices and the rate of inflation.