IDEAS home Printed from https://ideas.repec.org/a/sdo/regaec/v26y2017i3_4.html
   My bibliography  Save this article

Current Account Balance, Inflation, Industry And Sustainable Development In Jordan

Author

Listed:
  • Mohammad ALAWIN
  • Mohammad OQAILY

Abstract

The study aims at measuring the impact of the current account on inflation in Jordan. In order to achieve that goal, the study presents theoretical and econometric framework for an economic model that includes the determinants of inflation where current account deficit is one of them. The study finds out that the increase in current account deficit affects domestic inflation negatively in the long run. This result would be attributed to the fact that current account deficit absorbs big part of the excess in the domestic demand, in addition to the long run flexibility of the economy to produce substitutes for imported goods. However, in the short run, it was found that current account deficit affects domestic inflation positively. It was found that for this period there is no enough flexibility for the Jordanian economy to produce enough goods to substitute imports, which leads to inflation.

Suggested Citation

  • Mohammad ALAWIN & Mohammad OQAILY, 2017. "Current Account Balance, Inflation, Industry And Sustainable Development In Jordan," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 26(3), pages 45-56.
    • Handle: RePEc:sdo:regaec:v:26:y:2017:i:3_4
    as

    Download full text from publisher

    File URL: https://revistas.usc.gal/index.php/rge/article/view/4459
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    2. GUISAN, Maria-Carmen, 2014. "World Development, 2000-2010: Production, Investment And Savings In 21 Areas Of America, Africa, Asia-Pacific, Europe And Eurasia," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 14(2).
    3. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    4. Granger, Clive W J, 1986. "Developments in the Study of Cointegrated Economic Variables," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 213-228, August.
    5. GUISAN, Maria-Carmen & AGUAYO, Eva & EXPOSITO, Pilar, 2014. "Econometric Model Of Manufacturing, Investment And Development In 30 Countries Of Asia-Pacific," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(2).
    6. GUISAN, Maria-Carmen, 2008. "Manufacturing and Economic Development: Inter-sectoral relationships in Europe, America, Africa and Asia-Pacific, 1999-2006," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 8(2), pages 73-88.
    7. Wojciech W. Charemza & Derek F. Deadman, 1997. "New Directions In Econometric Practice, Second Edition," Books, Edward Elgar Publishing, number 1139.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tamer Rawashdeh & Mahmoud Al-Rdaydeh & Basem Hamouri, 2020. "The Effect of International Currency Crises on the Balance of Payments: Evidence From Jordan," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 275-284, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wilton Bernardino & João B. Amaral & Nelson L. Paes & Raydonal Ospina & José L. Távora, 2022. "A statistical investigation of a stock valuation model," SN Business & Economics, Springer, vol. 2(8), pages 1-25, August.
    2. M. T. Alguacil & V. Orts, 2003. "Inward Foreign Direct Investment and Imports in Spain," International Economic Journal, Taylor & Francis Journals, vol. 17(3), pages 19-38.
    3. Barja, Gover, 1995. "Time Series Analysis of Macroeconomic Conditions in Open Economies," MPRA Paper 62178, University Library of Munich, Germany.
    4. Fredj Jawadi & Catherine Bruneau & Nadia Sghaier, 2009. "Nonlinear Cointegration Relationships Between Non‐Life Insurance Premiums and Financial Markets," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 76(3), pages 753-783, September.
    5. Levent KORAP, 2008. "Exchange Rate Determination Of Tl/Us$:A Co-Integration Approach," Istanbul University Econometrics and Statistics e-Journal, Department of Econometrics, Faculty of Economics, Istanbul University, vol. 7(1), pages 24-50, May.
    6. Bardsen, G. & Klovland, J.T., 1990. "Finding The Rigth Nominal Anchor: The Cointegration Of Money, Credit And Nominal Income In Norway," The Warwick Economics Research Paper Series (TWERPS) 350, University of Warwick, Department of Economics.
    7. Oleg Deev & Martin Hodula, 2016. "Sovereign default risk and state-owned bank fragility in emerging markets: evidence from China and Russia," Post-Communist Economies, Taylor & Francis Journals, vol. 28(2), pages 232-248, April.
    8. Pedro Hugo Clavijo Cortes, 2017. "Balance comercial y volatilidad del tipo de cambio nominal: Un estudio de series de tiempo para Colombia," Revista Economía y Región, Universidad Tecnológica de Bolívar, vol. 11(1), pages 37-58, June.
    9. Sandrine Lardic & Valérie Mignon, 2004. "Fractional cointegration and the term structure," Empirical Economics, Springer, vol. 29(4), pages 723-736, December.
    10. Concetta Castiglione, 2011. "Verdoorn-Kaldor’s Law: an empirical analysis with time series data in the United States," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 1(3), pages 1-8.
    11. Ali Anari & James Kolari, 2001. "Stock Prices And Inflation," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 24(4), pages 587-602, December.
    12. Tung Liu & Lee C. Spector, 2005. "Dynamic employment adjustments over business cycles," Empirical Economics, Springer, vol. 30(1), pages 151-169, January.
    13. Esther Stroe-Kunold & Joachim Werner, 2009. "A drunk and her dog: a spurious relation? Cointegration tests as instruments to detect spurious correlations between integrated time series," Quality & Quantity: International Journal of Methodology, Springer, vol. 43(6), pages 913-940, November.
    14. Jones Danquah & Daniel Sarpong & Ari Pappinen, 2013. "Causal relationships between African mahoganies exports and deforestation in Ghana: policy implications," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 15(1), pages 51-66, February.
    15. S. Gurcan Gulen, 1996. "Is OPEC a Cartel? Evidence from Cointegration and Causality Tests," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 43-57.
    16. Ericsson, Neil R., 1992. "Cointegration, exogeneity, and policy analysis: An overview," Journal of Policy Modeling, Elsevier, vol. 14(3), pages 251-280, June.
    17. Elżbieta Szaruga & Elżbieta Załoga, 2022. "Environmental Management from the Point of View of the Energy Intensity of Road Freight Transport and Shocks," IJERPH, MDPI, vol. 19(21), pages 1-22, November.
    18. James Kung & Andrew Carverhill, 2005. "A cointegration study of the efficiency of the US Treasury STRIPS market," Applied Economics, Taylor & Francis Journals, vol. 37(6), pages 695-703.
    19. Michael J. Dueker & Richard Startz, 1997. "Maximum-likelihood estimation of fractional cointegration with application to the short end of the yield curve," Working Papers 1994-027, Federal Reserve Bank of St. Louis.
    20. Barkoulas, John T. & Barilla, Anthony G. & Wells, William, 2016. "Long-memory exchange rate dynamics in the euro era," Chaos, Solitons & Fractals, Elsevier, vol. 86(C), pages 92-100.

    More about this item

    Keywords

    Current Account; Inflation; trade balance; Jordanian economy.;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • F10 - International Economics - - Trade - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sdo:regaec:v:26:y:2017:i:3_4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marisa Chas-Amil (email available below). General contact details of provider: https://edirc.repec.org/data/feusces.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.