Abstract

This research tried to study, efficiency of Iraq stock exchange for monetary policy. Knowledge of impact of monetary policy on the stock market, policy-makers can design appropriate policies to direct investments to selected sectors. In addition, this study serve to shed light on emerging market and to identify the extent of its efficiency, is in addition to the economic literature in this area, and to identify the extent of the applicability of the efficient market hypothesis under rational hypothesis. More specifically, this study attempts to answer a following question: Is belief, that stock markets in developing countries are not efficient comprehensive for each market in its? Or that each developing country conditions is that control the efficiency of markets, including the stock market? Moreover, this study attempts to apply self-vector auto regression model (VAR) to identify the nature and direction of relationship between stock prices and money supply in Iraq. The study examines stationary of statistical properties of the time series to see how of whether or not. something important in a design of economic models to avoid the problem of Spurious regression between variables is static, any regression caused by a general trend in the time series of variables, it is not evidence of an economic relationship between them.