The Relationship between Real and Banking Sectors in Jordan

M. Alawin, T. Al-Muhaissen and E. Merza

Applied Econometrics and International Development, 2013, vol. 13, issue 2, 129-134

Abstract: This paper investigates the interrelation between real side and banking side in Jordan,using real GDP as an indicator for the real side, changing in private debt and capital adequacy index as indicators for the banking side for the period 1980-2011. The results indicate that there is a positive relationship between the two sides in the short run. Impulse Response Function (IRF) verified that changing in the private debt affects RGDP significantly, suggesting that the banking side affects the real side. Also, the IRF verified that capital adequacy index affects RGDP, suggesting that the strength of banking system also affects the real side too.

Keywords: Private Debt; Banking System; Capital Adequacy index; cointegration; Jordan. (search for similar items in EconPapers)
Date: 2013
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