Determinants of Fiscal growth in Jordan

Abstract

This study aims to attempt to measure the direction of the causal relationship between the rate of Fiscal growth in Jordan and among some independent variables that are believed to affect it: the size of the available liquidity in the banking system, the proportion of credit extended to the private sector as a whole, the volume of market capitalization money, and the Fiscal policy of governments. To achieve the objectives of the study and to test its premise, a time series of historical data available for the study variables during the period of 1982 – 2010 has been used.

The study found the presence of a range of causal and positive statistical relationships and a two-way between three independent variables: the size of the available liquidity in the banking system, the proportion of credit extended to the private sector as a whole, the volume of market capitalization money, and with the Fiscal growth rate, while an impact of the government's Fiscal policy on the dependent variable has not been proven.

The study recommended a set of recommendations that are believed to affect the Fiscal  growth rate of Jordan, notably: encouraging mergers between local banks, reconsider the legislation of intellectual property rights and standards of Fiscal  disclosure practiced by local Fiscal  institutions, and finally try to link the orientations of the governmental Fiscal  policy trends with the local economic growth, and coordinate the  relationship and organize it with the requirements of the monetary policy.