العلاقة بين عرض النقد و التضخم : تحليل قياسي على الاقتصاد الأردني

Abstract EN

This study aims to test and analyze the relationship between the supply of money and inflation in the Jordanian economy during 1968-2015.

In order to achieve the objective of the study, the methodology of econometric analysis of time series was used.

The stability of the study variables was tested using the Augmented Dickey-Fuller (ADF) test before applying Johansson’s co-integration methodology to test the long-term equilibrium relationship.

The Granger’s causality test was used to determine the direction of the causal relationship, if exist, in the short term.

Finally, an econometric model was formulated to estimate the economic relationship between the variables of the study .

The results of the study indicate that while the money supply was unstable at the level and stabilized after taking the first difference, inflation has stabilized at the level.

The results of cointegration also indicated that there was no causal link between the money supply and the price index, in the long-term.

The results of Granger's causality show a unidirectional causality running from the money supply to inflation, which means that money supply causes inflation in Jordan, not vice versa.

The results of the econometric model indicate that the change in the money supply has a significant impact on the change in prices.

The study recommends the need to manage changes in the supply of money in a way that limits the rise in prices to achieve economic stability.

It also recommends the application of econometric models, including the study model, in the control of local liquidity and price behavior to achieve economic stability.

Further specialized research is needed to analyze the impact of money supply and its mutual effects on other macroeconomic indicators, especially the interest rate and discount rate.