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Does Inflation Harm Economic Growth in Jordan?. An Econometric Analysis for the Period 1970-2000

  • Sweidan, O.D.

It is expected that inflation we will be an important issue in Jordan because the central bank of Jordan is adopting an easy monetary policy to help promoting the financial market.Therefore, this paper explores the relation between inflation and economic growth to check whether if this relation has a structural breakpoint effect or not.This paper shows that the structural breakpoint effect occurs at inflation rate equal to 2% and after this level the effect turns to be negative. This result says that the maneuver of the monetary policy will be very limited. And, the central bank of Jordan should pay attention to the inflation phenomenon while conducting the new monetary policy.

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Article provided by Euro-American Association of Economic Development in its journal International Journal of Applied Econometrics and Quantitative Studies .

Volume (Year): 1 (2004)
Issue (Month): 2 ()
Pages: 41-66

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Handle: RePEc:eaa:ijaeqs:v:1:y2004:i:1_9
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  1. Javier Andrés & Ignacio Hernando, 1999. "Does Inflation Harm Economic Growth? Evidence from the OECD," NBER Chapters, in: The Costs and Benefits of Price Stability, pages 315-348 National Bureau of Economic Research, Inc.
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  8. De Gregorio, Jose, 1992. "The effects of inflation on economic growth : Lessons from Latin America," European Economic Review, Elsevier, vol. 36(2-3), pages 417-425, April.
  9. Brian Motley, 1994. "Growth and inflation: a cross-country study," Working Papers in Applied Economic Theory 94-08, Federal Reserve Bank of San Francisco.
  10. Crawford, A & Kasumovich, M, 1996. "Does Inflation Uncertainty Vary with the Level of Inflation?," Staff Working Papers 96-09, Bank of Canada.
  11. Maghyereh, Aktham, 2003. "External Debt and Economic Growth in Jordan: the Threshold Effect," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 56(3), pages 337-355.
  12. Laurence Ball, 1990. "Why Does High Inflation Raise Inflation Uncertainty?," NBER Working Papers 3224, National Bureau of Economic Research, Inc.
  13. Engle, Robert F, 1982. "Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation," Econometrica, Econometric Society, vol. 50(4), pages 987-1007, July.
  14. Kormendi, Roger C. & Meguire, Philip G., 1985. "Macroeconomic determinants of growth: Cross-country evidence," Journal of Monetary Economics, Elsevier, vol. 16(2), pages 141-163, September.
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