Growth In Jordan Research Articles

Empirical Analysis of Air Pollution Impacts on Jordan Economy

Pollution and the economy appear to be intertwined throughout human history. Our knowledge of the connection between environmental damage and economic growth is fragmented due to disciplinary biases. Accordingly, the purpose of this research is to gain an understanding of the dynamic relationship that exists between air pollution and the economy of Jordan, as well as to investigate the existence of the Environmental Kuznets Curve (EKC), in order to determine which policy options would be most effective in reducing emissions while still allowing for continued economic growth. This study adopted the Bayer-Hanck Cointegration test and Granger Causality tests to achieve the objectives. Bayer-Hanck cointegration indicate that there exists a long-term relationship between air pollutants and economic growth. Moreover, Granger causality test shows that economic growth has a causal effect on the three air pollutants at a significance level of 0.05. By scholarly contributions to the debate between air pollutants and economic growth, this study aims to fill a gap in the existing literature by investigating the EKC hypothesis and the impacts of air pollution on economic growth in Jordan.

The Effect of Fiscal Policy on the Economic Growth: An Analytical Study, Evidence from Jordan (2005-2020)

The Jordanian economy faces a set of economic challenges, represented by the rise in unemployment rates, the decline in the rates of gross domestic product, and the rise in the general level of prices, which are the most important indicators of economic development. Jordan is considered one of the developing countries with limited resources, and it depends greatly on tax revenues, grants, and foreign subsidies to cover public expenditures. Because of the importance of fiscal policy to correct the economic path, and Jordan's need for an effective fiscal policy to achieve acceptable economic growth and find successful solutions to address poverty, unemployment, declining investment, adjusting public spending levels, and setting tax rates, this study aimed to examine the impact of fiscal policy tools (Tax Revenue, Domestic Revenue, External Debt, Foreign Grants and Total expenditure), on indicators of economic growth in Jordan (GDP, Inflation, and Unemployment), during the period 2005-2020. The study followed the analytical and descriptive approach using statistical programs through a multiple regression model based on historical quarterly data obtained from the statistical database of the Central Bank of Jordan and the Jordanian Department of Statistics during the study period. The most important findings of the analytical results of the study's hypotheses are a statistically significant effect of fiscal policy tools on GDP, inflation, and unemployment with explanatory power (94%, 97%, and 86.6%). Consecutively. This study contributed to finding a model capable of explaining the impact of public financial policy tools on the most important indicators of development in Jordan, by taking into account most of the financial policy tools, so it is expected that the results of this study will contribute to improving the quality of fiscal policy decisions in Jordan.

Dynamic relationship between Air pollution and Economic growth in Jordan: An Empirical Analysis

Dynamic relationship between Air pollution and Economic growth in Jordan: An Empirical Analysis

Dynamic relationship between Air pollution and Economic growth in Jordan: An Empirical Analysis

Apparently, throughout human history, pollution and the economy appear to have been inextricably linked. However, the relationship between environmental harm and economic development is complex, and disciplinary biases have splintered our understanding of it. This study applies Johansen cointegration which indicate that there exists a long-term relationship between air pollutants and economic growth. Multiple regression model indicates that there is a significant relationship between air pollution variables and the economic growth. The vector autoregressive model (Var) indicates a short run relationship between the variables. Then, Vector error correction model was fitted and the Environmental Kuznets Curve (EKC) is supported. More so, the EKC shows that economic growth has both positive and negative significant impact on air pollution. Meanwhile, Granger causality test shows that economic growth has causal effect on air pollution. This indicates that Jordan has reduced CO2 emissions along with other pollutants and thereby contributed to environmental improvement in the country.

The Full Lockdown in Jordan, 2020: The Economic Consequences

The study aimed to show the economic impact of the full lockdown, which was taken by the Jordanian government, represented by the disruption of official institutions, universities, schools, and non-essential economic activities from March 20, 2020, to May 31, 2020. 
 
 The study’s methodology was represented by comparing the economic indicators in 2020 with the previous years (10 years). Three economic indicators were considered: GDP per capita, unemployment rate, and economic growth. The study concluded that each GDP per capita and economic growth in Jordan decreased after the full lockdown, by an acceptable statistical significance. The unemployment rate in Jordan increased after the full lockdown by an acceptable statistical significance.

The impact of electric energy consumption on economic growth in Jordan for the period( 2005-2019).

The impact of electric energy consumption on economic growth in Jordan for the period( 2005-2019).

The Effect of Covid-19 on the Economy of Jordan

The COVID-19 pandemic and its socioeconomic impacts in Jordan are rapidly evolving, with the impact being shaped not only by the effects of the virus's spread on the broader economy, but also by the nature of the government response—movement restrictions and other emergency measures—and Jordan's key development partners' support. It is critical to have a good understanding of who is impacted, how, and for how long in order to adopt suitable mitigation measures or to change existing emergency measures. The study's goal is to provide evidence for policy and programming objectives, as well as to aid in the development of appropriate strategies to mitigate the pandemic's effects in Jordan. The study assesses the impact of COVID-19 on unemployment, public debt and economic growth in Jordan. The study found that the Jordanian economy reported major challenges in terms of decreased growth, increased unemployment, and increased public debt Compared to previous years before the breakout of COVID-19.

The Relative Effectiveness of Monetary and Fiscal Policies:Evidence from Jordan

The study aims at investigating the relative effectiveness of monetary and fiscal policies on economic growth of Jordan during the period 1977- 2019 using Autoregressive Distributed Lag (ARDL) methodology. The variables of the study were integrated of different orders as indicated by Augmented Dickey-Fuller (ADF) unit root test. Bounds cointegration test revealed that there is a cointegrated long-run relationship between the study variables. The study results showed that there is a statistically significant positive long-run relationship between real GDP and each of broad money supply and total government expenditures. Moreover, the long-run coefficient of money supply was much greater than that of government expenditures, implying that the effectiveness of monetary policy is higher than that of fiscal policy in affecting the economic performance, and both policies can be implemented to stimulate the economic growth in Jordan. Therefore, the study recommends the Jordanian government to improve the management of fiscal policy by controlling its current expenditures, increasing the productive investments, as well as applying a comprehensive tax reform in order to strengthen the role of fiscal policy in boosting the economic growth.

The role of SMEs finance in economic growth, and will their interactions lead to stimulating economic growth in Jordan?

The role of SMEs finance in economic growth, and will their interactions lead to stimulating economic growth in Jordan?

Economic Growth and Foreign Direct Investment in the Context of Financial Development: Evidence from Jordan

Purpose: The objective of this study is to analyze the relationship that exists among economic growth and FDI in Jordan empirically, and the role of financial development in shaping this relationship. Design/Methodology/Approach: This research used the process of deductive reasoning approach, associated with quantitative research, supported by empiricism and positivism as philosophical positions. Growth Indicators, FDI, financial development and other control variables data that covered the period between 1993-2018 were used. The analysis method of Johansen’s co-integration will be applied to figure out if the relationship between economic growth, FDI and financial development exist. Findings: The Johansen’s co-integration has found out that there is a long-term relationship between FDI, financial development and economic growth. Also, interaction between stock market financial development indicators and FDI was statistically evident. Practical Implications: Our research contributes to the literature by examining if FDI is growth inducing through networks of financial development, and other factors that could drive growth alongside with FDI. Research shows professionals that a well-developed financial market will improve FDI's spillover impact on economic growth. A well-developed stock market will speed up capital accumulation activities and output growth by providing sufficient liquidity services that improve linkages between domestic and foreign investors. Originality/Value: The novelty of the research is to determine the correlation between FDI and Economic growth in Jordan which should be accounted in the long-term development of all developing countries. At the same time, this study is a step forward towards analysing the relationship that exists among economic growth and FDI in Jordan.

The Effect of Government Support for Fuel and Wheat on Economic Growth in Jordan: An Application of Dynamic Autoregressive-Distributed Lag

The Effect of Government Support for Fuel and Wheat on Economic Growth in Jordan: An Application of Dynamic Autoregressive-Distributed Lag

The Impact of Stock Market Development on Economic Growth in Jordan

The strong development of stock markets is reflected in acceleration in the number of IPOs and a very sharp increase in transaction volumes (amounts of securities traded). To understand the effects of stock market development on Jordan’s economy, this research adopted the use of secondary time series info. Based on the descriptive statistics approach adopted, there are specific findings that define the overall objectives of the study. The findings show that the stock growth and private sector credit expansion optimistically contributes to the economic prosperity and development of the Jordanian economy. Moreover, the research findings also indicate that a foreign direct investment, which also influences the country’s stock, has an outcome on the country’s economic development in the long run. Further, the research findings also show that the economic development of Jordan is not affected by the domestic credit awarded to the private sector. However, the findings also show that trade involving stock has a minimal effect on the development and growth of the Jordanian economy. Overall, the research reveals that the FDI, the total stock value of trade, and the nationwide credit to the private sector have an influence on the economic growth of a country.

International Financial Flows its Effects on Economic Growth in Jordan

International Financial Flows its Effects on Economic Growth in Jordan

The Decline Of The Middle Class In Jordan

Declining economic growth in Jordan, rising unemployment and the abolition of state support for certain segments of the population have led to a deterioration in the welfare of the middle class in Jordanian society. The importance of the middle class for the country is due to the fact that they act as a driving force in creating a market economy, as well as implement creative and intellectual work. The article considers the essential importance of the middle class and its role in building a democratic and legal state, as well as in ensuring a stable pace of economic development. The purpose of this article is to analyze the level of decline in the middle class in Jordanian society during 2010-2017. The following indicators were used to conduct this study: average annual income, double the national poverty line and the share of the population that receive an average of 60% of income. The source of statistical information was the data of the World Bank and the General Statistics Department of Jordan. The author of the article proposes to calculate a generalized indicator for the characteristics of the middle class in society – the average annual household income index. The study showed that during 2010-2017 there was a significant reduction in the size of the middle class in Jordan. The author suggests that such negative dynamics will persist in the coming years, especially given the decline in economic activity due to the coronavirus pandemic. It is proved that the inefficiency of state economic and social policy has led to an increase in the number of poor people, as well as rising unemployment in the country. According to the results of the study, it is proposed to adjust government programs to ensure the preservation of the middle class and enable it to realize its potential in stimulating economic growth, human capital development and supporting the development of civil society in Jordan.

The effect of tax revenues on GDP growth in Jordan

The research aims to identify the impact of tax revenues on the growth of the gross domestic product (GDP) in Jordan during the period 2000-2018. The research reaches a set of results, which is that the greater the value of tax revenues by one unit, the greater the value of the GDP in Jordan by 7.257 units during the same period. There is also a positive effect of tax revenues on the growth and increase of the GDP in Jordan, however, there is no common integration between tax revenues and the GDP in Jordan. Moreover, there is a correction from the short term to the long term and there is an effect of the long-term correction of the relationship between tax revenues and the GDP during the study period. The study recommends the need to work to facilitate the procedures for individuals to pay taxes through modern technological means, work to develop and simplify tax services and raise the level of transparency in tax dealings with all individuals, the need to make amendments to the tax law in order to match the living conditions of individuals and achieve the highest efficiency in collecting due taxes, increasing tax exemptions that are offered to foreign investment to encourage them for investments in all economic, commercial, service and industrial fields in Jordan, working to diversify sources of income for the Jordanian economy and not to rely entirely on tax revenues as a primary source of income.

Military spending and growth: the post-covid-19 new normal in Jordan

Purpose - COVID-19 has forced governments to implement fiscal policy measures that will widen budget deficits in many countries. Economies with limited public revenues or limited fiscal space, like Jordan, will probably suffer more, and probably for years to come. The expected deterioration in the status of public finance will force the government in Jordan to make difficult choices in the re-allocation of its budgetary resources. Within this context, the fact that Jordan has always been a relatively big spender on the military, the pandemic might lead to some decrease in this spending item. This is why the objective of this paper examines the impact of military spending on economic growth in Jordan. Methodology – To examine the nexus between military spending and economic growth, this paper uses annual data that covers the period 1980 – 2019. The variables used in the analysis are real Gross Domestic Product (GDP), real military spending, and real bank credit to the private sector. As for the methodology, time series techniques are used and these include stationarity tests, co-integration and the long run relationship. Findings – The impact of military spending on real economic growth is negative. The impact of bank credit to the private sector, on the other hand, is positive and significant. In addition, the results indicate that that bank credit to the private sector reflects increasing importance in explaining the variability in real economic growth over time. Conclusion - The fact that military spending is relatively high, and its impact on growth is negative, policy makers might be tempted to shift financial resources from this sector to other such as health and education. However, such a decision would not be easy given the fact that Jordan is located in a politically and security unstable environment. After all, military spending the lack of security can be a major impediment to growth and development.

The Relation between the Financial Market Development and Economic Growth in Jordan

The purpose of this study is to examine the relationship between economic growth and financial market development in Jordan through the co-integration and error correction model between during the period 2000-2018. The study employs the error correction model to determine the short-run dynamics of the system and the cointegration test to examine the long-term relationship . The study is limited to a few variables, changes in real Gross domestic product GDP and the IMF indicator for financial market development . The results show that in the long-term there is a significant relationship between economic growth and financial market development for Jordan data., while in the short-term there is no statistically significant relationship between the stock market development and economic growth. Furthermore, causality is going from economic growth to financial market development, not vice versa. Keywords : Economic Growth, financial market development, Amman stock market, IMF indicator. DOI: 10.7176/JESD/10-14-12 Publication date: July 31 st 2020

An Empirical Assessment of the Effect of Taxes and Interest Rate on Economic Growth in Jordan: An Application of Dynamic Autoregressive-Distributed Lag

This study aims to examine the effect of taxes and interest rate on economic growth in Jordan by employing the time series data from 1970-2019. Furthermore, this study applies the Augmented Dickey-Fuller, Phillips-Perron, Saikonen and Lütkepohl and Zivot-Andrews test of unit root. Moreover, the study uses cointegration test developed by Gregory and Hansen to investigate the long-run relationship and the dynamic autoregressive distributive lags were used for the estimation result. The long run and short-run estimates reveal the positive and negative effects of taxes and the interest rate on economic growth respectively. While the 1997 Asian financial crisis and 2015 food crisis show a negative effect on economic growth. Based on the findings, the study recommends that the government authorities in Jordan should lower the interest rate that will increase the investment in order to have faster economic growth. The government should urgently plan to broaden the tax base to stimulate economic growth in Jordan. Regulators should encourage banks to start raising capital immediately to strengthen capital ratios well above prudential norms, and prepare schemes for public recapitalization and, where appropriate, public purchases of non-performing assets. The next policy fulfils the government's need to enhance agricultural productivity through better technology to ensure long-term food security and reduce poverty, as well as help to boost economic growth.

The Relationship between Public Debt and Economic Growth in Jordan for the Period (1990-2018)

The study aims to identify the effect of public debt on economic growth in Jordan between1990 and 2018. The importance of the study lies in the effects of net public debt on the Jordanian economy and economic stability, and thus the identification of the role of public debt in Jordanian economic growth. To achieve the aim of the study the descriptive analytical approach was used. Simple Linear Regression (SLR) has been employed to measure and analyze the relationship between Net Public Debt (NPD) and Gross Domestic Product (GDP). The study showed that there is a clear negative relationship between the ratio of NPD to GDP and the rate of economic growth in Jordan during the first period of the study, and this relationship became more clear during the period 2006-2018, and this negative relationship became strong when the public debt ratio to GDP exceeded 80.0%. Keywords : Gross Domestic Product (GDP), Net Public Debt (NPD), Net External Debt (NED), Net Domestic Debt (NDD), Economic Growth (EG), Jordan. DOI: 10.7176/JESD/11-12-09 Publication date: June 30th 2020

The Impact of Human Capital and Foreign Direct Investment on Economic Growth: An Empirical Study on Jordan

Human capital is a real factor in improving the investment climate and attracting foreign investment. FDI also increases human capital in the host country through the transfer of advanced technology and the rehabilitation of local labor. The importance of the study comes from Jordan's serious endeavor to attract foreign direct investment and to present itself as a rich country in human and qualified capacities. This study examines the effect of human capital and foreign direct investment on economic growth in Jordan employing Auto Regressive Distributed Lags Bounds Testing (ARDL BT) co-integration method for the spanning period from 1984 to 2018. The results indicate that there is a long- run relationship among variables. The results showed that there is a negative and statistically significant effect of human capital index (HCI) on economic growth (GWP) in the long run, and a positive and statistically significant effect of FDI (GFDI) on economic growth (GWP) in the long run. The estimation results indicate that a 1% increase in (HCI) decreases (GWP) by 0.272%, and a 1% increase in (GFDI) increases (GWP) by 0.006%. This study is one of the few studies that highlight the challenges facing both HC and FDI in increasing economic growth in Jordan and provides some recommendations.