Fiscal Policy Tools and Economic Growth in Jordan: Evidence from Time-Series Models

Mohamed Ibrahim Mugableh

International Journal of Economics and Finance, 2019, vol. 11, issue 1, 1-7

Abstract: This paper examines equilibrium relationships and dynamic causality analyses between economic growth and fiscal policy tools in Jordan for the (1978-2017) period. It employs autoregressive distributed lag and vector error correction models. The results suggest that there is evidence of a co-integration and causal relationships between economic growth and fiscal policy instruments. General government expenditures have long-run positive impact on economic growth, implying that general government expenditures improve economic growth. Moreover, total tax rates have long-run negative impact on economic growth, implying that a tax cut stimulates economic growth. These results are broadly consistent with similar studies carried out for other developing economies.

Keywords: econometrics; economic growth; fiscal policy; Jordan (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:11:y:2019:i:1:p:1-7

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