The Fiscal Policy Instruments and the Economic Prosperity in Jordan

• 발행기관: 한국유통과학회
• 저자명: Jumah A. ALZYADAT Iyad A. AL-NSOUR
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.1, 113~122쪽, 전체 10쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.01.30

영문 초록

This study aims to investigate the effects of fiscal policy instruments on economic growth in Jordan using annual data from 1970 to 2019, by applying the VAR model (Vector Auto regression) and the Vector Error Correction Model (VECM). The study also examines the dynamic relationship among economic variables over time using the Granger casualty test, Impulse Response Function, and Variance Decomposition. The results show that not only the public expenditures have a positive effect on economic growth in Jordan, but also the tax revenues positively affect the economic growth in the short-run, and this is because of using the tax revenues to finance the government activities in Jordan. This effect becomes negative in the long run, and this is explained because the tax seems a source of distortions in the economy, The extreme taxes may cause huge distortions in the economy, and these distortions destroys the purchasing power, the aggregate demand, and supply. More governmental dependence on tax revenues is the main source of tax evasion and less efficiency. The effect of taxation will curb any prosperity in the economy. Therefore, the government should estimate the fair tax rates to generate sufficient revenues to finance the public expenditure required to enhance economic prosperity.

목차

1. Introduction

2. Literature Review

3. Methodology and Model Specifications

4. Empirical Results and Interpretations

5. Conclusion and Policy Implications

References

키워드

Fiscal Policy Public Expenditure Tax Revenues Economic Prosperity Jordan