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Analyzing the Relationship Between the Budget Deficit and Macroeconomics Variables |
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PP: 233-243 |
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doi:10.18576/amis/190120
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Author(s) |
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Khaled Mohammed Al-Sawaie,
Nidal Ali Abbas,
Ahmad HabesAlmajali,
Hamza Mahmoud Alrawashdeh,
Mohammad Matroud Al-Smeiran,
Fayez Haddad,
Asokan Vasudevan,
Suleiman Ibrahim Mohammad,
Wen Zhou,
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Abstract |
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| This study examines the relationship between budget deficit and selected macroeconomic variables in Jordan for the period 2008 to 2023. The research employs ARDL methodology, stationary analysis techniques, and bounds testing to investigate the long- term connection between the variables being studied. The integration bounds test showed that the variables are cointegrated, implying a long-term relationship. The ARDL estimation results revealed that there is a significant negative association between real GDP and the budget deficit, with all other variables showing positive relationships. The study suggests that Jordan’s fiscal authorities should implement effective strategies for collecting taxes and managing public sector expenditures. Jordan has experienced a budget deficit since its formation, which has been linked to issues such as high debt, inflation, limited investment, and slow growth. The research added to the real-world discussion on how budget deficits impact macroeconomic factors by utilizing ARDL and Granger causality methods.
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