International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

The Causal Relationship between Fiscal Policy and Economic Growth in Jordan
Ruba Abu Shihab

This study aims to examine the causal relationship between economic growth and fiscal policy in Jordan using the Granger methodology in order to determine the direction of the relationship between the two variables during the period 2000-2012. The study found that there is a causal relationship going from the economic growth to budget deficit, and not vice versa. Based on the outcome of causality tests, the changes in the economic growth help explain the changes that occur in the budget deficit.

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