The Burden of Debt on the Jordan's Economy During the Period (1980-2011)

Fadel Al-Mawla Al-Habashneh, Khalid Ali Al Majali, Huthaifa Sameeh Al Qaralleh

Abstract


The study aims at presenting the burden of debt on the Jordan's economy during the period (1980-2011). In order to achieve the above objective, we use a Co-integration Johansson method to find an Integrated Relationship between the variables, and implement the ADF (Augmented Dickey Fuller) to test the stability of the data. The test indicates that all the variables are stable at the first difference so that they are integrated first order.
Granger test for causality has been also applied to the data so as to clarify the relationship among the variables of the study, which found that the relationship was one-way from the direction of the growth of public debt to GDP, also the impulse response function indicates that the results are in agreement with prior knowledge and previous studies. The main finding of the study suggests that the effect of public debt in economic activity will be negative the long run.

Keywords


The Jordanian Gross Domestic Production, The Jordanian Public Debt, Jordan's Economy, Debt Burden.

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