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Interaction Among Economic Growth and Some Macroeconomic Variables in Jordan                

Nader Al zabadi   

Amjad Horrani

Keywords:  Economic growth, inflation, public expenditures, FDI, ARDL.

Published                    2025-06-01

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Abstract :  This research explores the interaction between economic growth and some Macroeconomic Variables in Jordan (public expenditures, trade openness, foreign direct investments, gross capital formation, Labor force, inflation rates), annual time series from 1980 to 2022 employed, utilizing the auto-regressive distributed lag (ARDL) bounds testing method for cointegration to provide policy recommendations regarding the effectiveness of macroeconomic factors both in the short and long term. The empirical findings show that gross domestic product (GDP) cointegrated with macroeconomic variables. The outcomes of the long-run analysis indicate that public expenditures, gross capital formation, and the labor force positively influence Jordan's economic growth. In the short run, public expenditures, gross capital formation, and low inflation rates, have a favorable impact on economic growth in Jordan. However, trade openness has negative impact on Jordan’s economic growth in short run. The study suggests that Jordanian policymakers should focus on enhancing gross capital formation levels, maintaining low inflation rate, reviewing trade liberalization policies.

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